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The "Small Business Act" for Europe

03 August 2009
by inadim -- last modified 08 August 2009

Adopted in June 2008, the "Small Business Act" for Europe (SBA) reflects the European Commission’s political will to recognise the central role of SMEs in the EU economy and for the first time puts into place a comprehensive SME policy framework for the EU and its Member States.


What is the "Small Business Act" for Europe (SBA)?

  • a set of 10 principles which should guide the conception and implementation of policies both at EU and national level. This is essential to create a level playing
  • field for SMEs throughout the EU and improve the administrative and legal environment to allow these enterprises to release their full potential to create jobs and growth;
  • an ambitious package of concrete and far reaching new measures including 4 legislative proposals which translate these principles into action both at EU and Member State level;
  • is designed to be adopted by the European Council to ensure the full political commitment of both the Commission and the Member States together with regular monitoring of its implementation.

What the SBA does for SMEs

The SBA aims to...

Create an environment within which entrepreneurs can thrive and entrepreneurship is rewarded

With “Erasmus for young entrepreneurs”, new and budding entrepreneurs can now take advantage of cross-border mobility, as well as gaining experience and insight by spending time in an SME in a different country.

Honest entrepreneurs who have faced bankruptcy should quickly be given a second chance, by promoting a positive attitude in society towards a fresh start.

Design rules according to the "Think Small First Principle"

All new legislative and administrative proposals at European and national level should be subjected to an “SME test” to assess their impact on SMEs. Where this impact is considered negative, Member States will be able to use measures such as derogations, transition periods and exemptions in particular from information and reporting requirements.

Adapt public policy tools to SME needs

A new code of best practice for public procurement will facilitate SMEs’ access to public procurement contracts. It offers solutions to difficulties faced by small companies by improving access to information about public contracts and how to bid on-line, reducing excessive financial requirements, and cutting the paperwork.

A higher level of state aid will be allowed to smaller companies, and rules for state aid to SMEs will be made simpler. National governments also do not need to notify this support to the Commission. Overall, these measures increase the possibilities for state aid to SMEs.

Facilitate SMEs’ access to finance

The European Investment Bank Group will increase its range of financial products offered to SMEs, particularly mezzanine finance. In addition, more funds will be made available by the Commission for micro-credit and access to cross-border venture capital will be facilitated.

Late payments can be crippling for SMEs. To simplify existing provisions and ensure that SMEs get paid within 30 days, the Commission is proposing a revision of the Late Payments Directive.

Help SMEs to benefit more from the opportunities offered by the Single Market and third-country markets

A new statute for a European Private Company will allow SMEs to start up and operate according to the same company law provisions throughout Europe.

The Commission’s new proposal on lower VAT rates for labour intensive services will have a positive effect on SMEs offering services such as hairdressing, catering, and repair services.

Background documents

Commission Communication of 4 October 2007:

"Small and medium-sized enterprises - Key for delivering more growth and jobs. A mid-term review of Modern SME Policy"

Commission Communication of 11 November 2005:

"Implementing the Community Lisbon Programme - Modern SME Policy for Growth and Employment"

Source: European Commission

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