Ministers tailor Small Business Act to ongoing economic crisis[fr][de] 

With the financial crisis in the US starting to take its toll on the European economy and Europe and its SMEs in particular, ministers agreed to focus on those parts of the SBA “where we can not only have long-term, but also short-term effects”, Commission Vice-President in charge of industry Günter Verheugen said after the meeting, commenting on the “strategic importance” of the text for Europe’s competitiveness. 

In particular, the ministers identified access to finance as an issue of primary importance for SMEs. “We need to have improved mechanisms to deal with venture capital," said French State Secretary for SME policy Hervé Novelli, who chaired the meeting. In this context, he lauded the recent decision to increase SME funding by the European Investment Bank (EIB) (EurActiv 15/09/08). 

Cost cutting through reduced administrative burdens as well as improving access to foreign markets are other areas where immediate action is needed, Novelli added. 

Notably, the introduction of a single date of entry into force for legislation relevant to SMEs could provide those businesses that lack the necessary staff to monitor developments throughout the year with a certain planning reliability, said Novelli. 

Despite French Presidency pressure to include measures allowing reduced VAT rates to be applied to labour-intensive services, such as catering, in the SBA package (EurActiv 08/07/08), countries like Germany remain skeptical and no progress was made on the issue yesterday. 

A directive on reduced VAT rates would not force member states to put such a system into place, but Novelli stressed that, with the rising number of bankruptcies in the catering sector, member states needed to have at least the option of using such a scheme. 

Commissioner Verheugen was confident that “at the end of the day we can find a solution that is also acceptable to Germany” and said the Commission would present a report on reduced VAT rates in October as requested by the ECOFIN Council. 

Ministers voiced “broad support” for adopting the SBA, including the short-term action plan, at their next meeting on 1-2 December so that the Parliament could approve the whole package before the European elections next June. 

While UEAPME, the European craft and SME employers’ organisation welcomed the increased focus on access to finance and better regulation, "especially in the light of the worsening economic outlook", it expressed disappointment at "the meagre one-page out-comes of the Council discussion", which "do not feature any reference to public procurement and State aid". "Once again, member states preferred to procrastinate and hide behind words," commented Secretary General Andrea Benassi.

EU Ministers also decided to step up efforts against the “scourge” of counterfeiting and piracy by setting up a European observatory and a network for the rapid exchange of information on counterfeit products. They further called on the Commission and member states to submit an “anti-counterfeiting customs plan” for the years 2009-2012.