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ESBA Bulletin of 9 June 2017

12 June 2017
by ESBA -- last modified 12 June 2017

Commission Mulls Revision of SME Definition


Commission Mulls Revision of SME Definition

On 8 June 2017, the European Commission published an inception impact assessment regarding a potential revision of the EU SME definition. The original definition dates back to 2003 when the Commission published its Recommendation. This definition has been accepted and widely used throughout the EU and is a very important tool to determine whether companies fall within the scope of certain legislation, as well as regulating the eligibility for access to finance, such as the EU COSME programme.

ESBA welcomes the idea to revise the financial thresholds, as the combined effects of inflation and a surge in productivity call for a reassessment of the thresholds. Another important consideration is the EU's increased focus on EU scale-ups. These fast-growing SMEs are an important creator of employment and should receive maximum freedom and support. However, the Commission argues that under the current definition and thresholds, the majority of SMEs are discouraged from scaling up due to the fear of losing their preferential SME status. Scale-ups represent a very small portion of EU SMEs but ESBA believes that the Commission's argumentations hold value.

Secondly, ESBA supports the Commission's views that an airtight definition of what constitutes an SME is necessary to provide much needed legal certainty. The practice whereby large companies redesign their corporate structure to give the impression that it consists of many individual SMEs needs to stop, as it wrongly attributes benefits to these subsidiaries, away from real small businesses that actually need them.

Although the inception impact assessment does not strictly mention any plans to change the definition in terms of employee numbers, ESBA wishes to stress that the Commission should make no such attempt. In the past, there have been pressures, from certain countries and industries in particular, to include larger companies (mid-caps/Mittelstand) in the definition of SMEs. ESBA strongly opposes this idea as the SME definition is already very wide and inclusive; only 0.2% of EU companies fall outside of its scope. If anything, the definition should be further nuanced, to reflect the considerable differences between micro-companies and larger SMEs.

ESBA looks forward to working closely with the European Institutions on this matter, in support of its members, the SMEs.

Should you have any queries about ESBA's position, please contact Mr. Patrick Gibbels by email at patrick.gibbels@esba-europe.org or by phone at the +32 (0)2 274 2504.

IN BRIEF
EU/Services Package: Council move forward to harmonize and boost the service sector

On 29 May 2017, the Council adopted a general approach on two proposals of the Services Package. The first proposal lays down rules on the notification procedure in the services sectors while the second establishes requirements for the proportionality test. The Council agrees that the current notification procedure needs enhancement, but should respect the principles of subsidiarity and proportionality. As for the proportionality test, Ministers agreed on the need for a harmonised procedure across the EU. Ministers from the Council hope that this first step will facilitate movement of people and services across Member States. On a larger scale, the Services Package aims at boosting competitiveness and integration of the Single Market in the services sector.

For more information on the Services Package, please click here.

EU/Digital Single Market: Interinstitutional agreement reached for WiFi4EU scheme

On May 30 2017, the European Parliament (EP) and Council agreed on a scheme that will provide for over 5,000 wireless internet connections in public places across the EU. The WiFi4EU portal will be easily recognizable and multilingual to provide its users with a free, secure and high-speed internet. The EP Rapporteur hailed the initiative as a pilot project for effective connectivity of EU citizens and stated that such initiatives are key to building an inclusive Digital Union. While the draft deal still needs to be approved by the EP and Council before coming into force, some of the key provisions of the draft deal are: a single EU-wide authentication system for the portal, funding to be distributed evenly across MS, funding to public access points (e.g. libraries) only if the users can connect without direct payment, the operational costs of the portal (first three years) to be covered by the public authority offering it and the funds for financial support not to be available for private or public initiatives duplicating the WiFi4EU scheme.

For more information on the Digital Single Market strategy please click here.

EU/Trade: US officials hinting at reprise of TTIP negotiation

On 31 May 2017, Euractiv published an article reflecting on the future of TTIP negotiation. They were put on hold after Donald Trump was elected on a campaign ticket that went heavy on protectionist talk and policies. They also faced serious civil society opposition from the EU-Canada CETA deal's ratification process. Furthermore, EU trade policy was enriched with a great deal of clarity when the European Court of Justice ruled that its Singapore trade deal could not be concluded by the European Commission alone. The case will certainly prove to be vital in the future if the TTIP talks do indeed continue.
For more information on Transatlantic Trade and Investment Partnership (TTIP), please click here.

EU/Digital: Council adopt a position on new rules for contracts for the supply of digital content

On 8 June 2017, the European Council voted on a Directive that will set out new rules for business-to-consumer (B2C) contracts. The aim is to strengthen the level of protection and legal certainty for SME's cross-border activities. The compromise reached by the Council includes measures such as giving a second chance to businesses in case of lack of supplies, more flexibility for non-conformity and sets a one year period for the reversal of the burden of the proof. Consumers will be entitled to contractual remedies also when they provided personal data to suppliers. Negotiations with the Parliament will start once the latter has adopted its position, most likely during autumn 2017. This Directive is part of the Commission's Digital Single Market Strategy.

For more information on cross-border parcel deliver, please click here.

EU/Data Protection: Joint statement on the General Data Protection Regulation (GDPR) a year ahead of its application

On May 24 2017, Vice-President Ansip and Commissioner Jourova made a statement on the upcoming GDPR which introduces a new standard for personal data protection. Such protection is expected to be of benefit to citizens and businesses while also representing a precondition for the flourishing of the Digital Single Market (DSM). The Regulation's objectives are to update and simplify the data protection framework while grounding protection in citizen's fundamental rights. This will strengthen citizens' rights and simplify their ability to complain and obtain compensation while extending the sanction mandate of data protection authorities. The simplified, EU-wide rules will also be of benefit to businesses by increasing legal certainty and establishing a single data protection authority as a point of contact. SME-specific exemptions are also included to ensure that firms of all sizes and capacities may benefit from the new rules. The statement highlights that the real-life success of the GDPR primarily rests on the citizens' and businesses' awareness of their new rights. To this effect an awareness raising campaign will be launched and cooperation with companies will be stepped up to ensure a harmonised, EU-wide implementation.

For more information on Data Protection please click here.

EU/Growth: EU eases access to finance for SMEs

On 31 May 2017, the European Parliament, the Council and the Commission agreed on new legislation to facilitate access to finance for small and growing companies and social enterprises. This legislation is a vital part of EU's plan to develop a fully functioning capital market. Additionally, it expands funding sources concerning Europe's businesses and long-term projects. Malta's finance minister, Edward Scicluna, stated that the new regulations will stimulate market financing and thereby boost economic growth. Regulations 345/2013 and 346/2013 encourage investment in European venture capital funds (Euveca) and European social entrepreneurship funds (Eusef). The above-mentioned funds are related with young and innovative companies and enterprises whose aim is to achieve a positive social impact.

For more information on the new regulations, please click here.

EU/Taxation: ECON Committee in favour of a Proposal tackling the issue of double taxation

On 8 June 2017, the Economic and Monetary Affairs Committee voted in favour of a Proposal offering a better mechanism aimed at avoiding double taxation on businesses. Differing tax systems amongst Member States can result in businesses having to pay taxes multiple times on the same capital. This new mechanism would allow for greater incentive for Member States to resolve, in due time, disagreement over double taxation. Stricter deadlines, an arbitration procedure and the creation of an advisory panel will allow for a faster and more efficient resolution of disagreements in cases of double taxation.

For more information on the EU's tax policy, please click here.

PUBLICATIONS

Bruegel: The future of globalization

On 29 May 2017, Brueghel published a brief on globalization. This brief; reviewed the main features of recent globalization trends, attempted to explain its persistence over the centuries and why it is likely to persist in the indefinite future, examined the causes and prospects of the new protectionism and concluded by drawing policy implications in terms of employment, trade, etc.

To access this publication, please click here.

Martens Centre: A New Transatlantic Agenda IN FOCUS: Challenges and Opportunities in the Trump Era

On 24 May 2017, the Wilfried Martens Centre for European Studies published a research paper about the Transatlantic relations between the US and the EU. It concludes that while some of Trump's advisors may hold very simplistic views on the transatlantic trade balance, others believe that a trade war should definitely be avoided. This view is shared by the business community. Hence, in the footsteps of the moribund TTIP, and building on positions already agreed in that process, European leaders should propose a Transatlantic New Deal that considers people's fears about losing out to globalisation, and that more visibly strengthens the position of small and medium enterprises.

To access this publication, please click here.

CEPS: A new era of EU energy policy? Delivering on the Energy Union by National Plans

On 7 June 2017, the CEPS published a commentary on the 2016 Commission proposal for a new Regulation on Energy Union Governance as part of the "Clean Energy for all Europeans" Package. At the core of the Energy Union lie the Integrated National Energy and Climate Plans, in which member states will set out their national contributions to the 2030 energy targets and present objectives as well as policies and measures for each dimension of the Energy Union. The conclusion of the commentary is that while the transition to the new energy and climate policy regime for 2030 and beyond may require some short-term efforts by all stakeholders, the Energy Union governance system and its new National Plans will provide direct benefits for member states, investors and citizens alike in the medium and long term.

To access this publication, please click here.

CONSULTATIONS

Consultation: Data Base Directive: application and impact

DEADLINE: 30/08/2017

This public consultation aims at collecting up-to-date information on: the development of the market related to databases; the use and impact of the copyright and the sui generis protection regimes on the database makers and users; and the application of the Database Directive and potential needs for adjustment. In this ex-post evaluation, the Commission is assessing whether the Directive still fulfils its policy goals and is fit-for-purpose in a digital and data-driven economy.

To access this consultation, please click here.

Consultation: Interim evaluation of the programme for the competitiveness of enterprises and small and medium-sized enterprises

DEADLINE: 31/08/2017

This public consultation is part of the interim evaluation of the COSME programme (2014-2020), a programme for the competitiveness of enterprises and SMEs. The consultation forms part of the interim evaluation report which the Commission must write by 2018, as specified by the Regulation establishing the COSME programme. The objectives of the consultation are to collect information for the evaluation report related to: assessing the programme at mid-term in order to improve implementation and provide evidence for future initiatives. The evaluation cover activities for the period of 2014-2016.

To access this consultation, please click here.

COMING-UP

EU Institutions: important dates

12-14 June 2017: Working parties
12-15 June 2017: European Parliament Plenary Session
14 June 2017: Coreper I
14 June 2017: Coreper II
14 June 2017: European Parliament Committee Meetings
15 June 2017: Eurogroup
15 June 2017: Coreper II
16 June 2017: Employment, Social policy, Health and Consumer Affairs, Economic and Financial Affairs Council
19 June 2017: Working Parties
19-21 June 2017: European Parliament Committee Meetings
21 June 2017: Coreper I



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The European Small Business Alliance (ESBA) is a non-party political group, which cares for small business entrepreneurs and the self-employed and represents them through targeted EU advocacy and profiling activities.

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