Two key issues will shape the French EU Presidency in the area of competitiveness: the Small Business Act for Europe and the ongoing negotiations on the elusive Community patent.

The Small Business Act (SBA) is supposed to provide the answer to the woes of small and medium-sized enterprises (SMEs) in Europe. SMEs are crucial for the EU’s economy and global competitiveness, yet they face many obstacles in the form of red tape, overregulation, taxation or restricted access to funding.

However, the initiative has been marred by numerous disputes. SME organisations were pushing for a solid legal basis, but the European Commission has made clear it cannot propose a set of legally binding measures. The final package was proposed on 25 June in the form of a communication (see Europolitics3557).

The French have already secured a major success on this issue. It was mainly at their insistence that the Commission agreed to propose, by mid-2008, a European private company statute for SMEs, that could be created and operate on the basis of the same rules in all member states (3533).

The SBA is built on five main pillars. The first is supposed to make life easier for SMEs by focusing on simplification of EU legislation, exempting SMEs from the obligation to participate in repeated statistical surveys, introduce exemptions for SMEs from some accounting and auditing rules and reducing the burden from direct and indirect taxation.

Second, the SBA also aims to facilitate SME’s access to the single market (mainly by establishing the aforementioned company statute); third, to ensure their better access to public procurement (without, however, fixing any public procurement quotas for SMEs); fourth, to facilitate their access to finance; and fifth, to help them face the challenge of globalisation.

The other key topic, and one that is far from a guaranteed success, is the Community patent. The French delegation announced, at the last Competitiveness Council under the current Slovenian Presidency in June, that it will take up the sensitive dossier despite earlier misgivings (3541).

Slovenia has, in the last six months, made considerable progress on the crucial missing part of the Union’s intellectual property rights system. It has been working to clarify the issue of the future EU patent litigation system, but it is still unclear what form it will assume: whether it will be based within EU jurisdiction or outside it (3539).

Much work still needs to be done on the thorniest aspects of the patent itself: the translation of patent claims and their legal status, and the distribution of revenue from patent renewal fees. Most member states want to explore further the possibility of automated computer translation, but Spain insists on giving its language the same legal status as that of English, French and German.