The new version, dated 26 January and obtained by EurActiv, is markedly different from the first draft from 3 December (see EurActiv 27/01/11).
The changes reflect political jockeying within the Commission over which measures to prioritise. Several departments are being consulted on the issue, which helps explain why the publication has been repeatedly delayed.
The Commission's departments "are working together to create a credible document which meets the expectations of small and medium enterprises," said Charlotte Arwidi, spokeswoman for Commission Vice-President Antonio Tajani, in charge of enterprise and industry.
She said she hadn't seen the latest draft and, "these documents change all the time. The communication doesn't exist until it's adopted".
The SBA review is now scheduled to be released on 23 February, according to a person briefed on the plan.
The Small Business Act is being reviewed because small businesses will play a key role in three flagship initiatives of the 'Europe 2020' long-term strategy - the "Innovation Union," "Industrial policy for the globalisation era" and the "Digital Agenda for Europe".
Small and medium-sized enterprises (SMEs) – those with 250 or fewer employees – have been hammered by the recession and the credit crunch, and their recovery is equally pivotal for Europe. These SMEs employ more than two-thirds of the labour force in Europe and are the prime growth engine for the economy.
The Small Business Act went into effect two years ago. It had 10 guiding principles, including improving access to finance, drawing up bankruptcy rules to give entrepreneurs a second chance and upgrading skills.
Yet the impact so far has been weak, according to business advocates. The Commission acknowledged in the first draft that progress had been "slow" and "uneven" in member states. However, the latest revision merely says, "results achieved vary considerably".
What’s new in the latest SBA review?
According to the January draft, the Commission will:
- Strengthen the role of the SME Envoy (newly appointed Daniel Calleja Crespo, deputy director-general, who starts in mid-February) in monitoring the application of the SME Test in impact assessments of proposed legislation.
- Aim to help two million SMEs over 10 years through a stronger loan guarantee programme.
- Recommends member states reduce the start-up time for new businesses to three days, and cut the time to get licenses and permits to one month by the end of 2013.
- Reduce the time for a bankrupt company's debts to be discharged to a maximum of three years by 2013.
The first two items are "positive, that's something we're advocating for," said Luc Hendrickx, director of enterprise policy for the European Association of Craft, Small and Medium-Sized Enterprises (UEAPME).
As for the reduction of time to start a business, he said that's an "old issue" and the Commission shouldn't have a "fetish" target of three days when in some countries speed means more con artists can start a business.
What's disappeared from the December text?
The recommendations that have been downgraded or deleted include:
- Plans to carry out a deep analysis of unfair commercial practices in the European Union, taking into account the possibility to put forward a legislative proposal if needed.
- Analysing the market potential for SMEs in a number of third country markets (Brazil, Russia, India, China, eastern non-EU countries, Japan and South Korea) and proposing country-specific measures to facilitate SME access to these markets.
- Member states should simplify environmental permitting procedures by reducing issue time for permits, improving internal communication between administrative units and creating one-stop shops for environmental permits.
- A new legal base to transfer the Erasmus for Young Entrepreneurs (a pilot programme for professional exchanges) into a permanent programme.
The watered down and missing references were a disappointment to Hendrickx, who had not seen the draft, but noted that some companies wait six or seven months to get environmental permits.
But equally important are the recommendations that survived the political struggle of the past two months.
The Commission, for example, still has an ambitious plan to ensure venture capital funds established in any member state can function and invest freely in the EU and wants to adopt a new legislative regime.
EU heads of state and government, who are meeting in Brussels on Friday (4 February), are expected to endorse the plan, according to draft summit conclusions obtained by EurActiv.
Other key recommendations still in the draft include a legislative proposal for a common consolidated corporate tax base, an SBA Advisory Group and annual SME Performance Review.
The resource efficiency section was sliced to six recommendations from nine. But the top suggestion remained the same: implement the new energy efficiency plan.