As European companies struggle to get back on their feet after the severe blows to employment and competitiveness dealt by the economic and financial crisis, the European Union is multiplying its communications arguing for an enhanced industrial policy. On 6 October, it published one of its flagship initiatives on innovation, entitled ‘Innovation Union’. In a few weeks, it will publish another on industrial policy in the age of globalisation. Also in the works are the communications on the single market and on the revision of the Small Business Act, both postponed from their initial dates of unveiling. European companies are expecting a lot from these initiatives, which are supposed to address the lack of financial, human and natural resources with which they are confronted.

ACCESS TO CREDIT

One of the key problems still plaguing small and medium-sized enterprises (SMEs) is access to credit. Despite the efforts of the European Investment Bank (EIB) and the European Union to remedy this situation, 19% of SMEs in the eurozone still mentioned this as one of their greatest problems in the latter half of 2009. The Union’s economic recovery plan, adopted in Nice in 2008, makes some €30 billion available to SMEs for 2008-2011 through the EIB. Industry Commissioner Antonio Tajani acknowledges that the situation is difficult. “According to the European Central Bank, tight credit conditions rose from 4% to 14% during the second four-month period.” On 28 September, he launched a new forum on SME financing that will meet three times a year to try to work out solutions.

SMALL BUSINESS ACT

Access to credit is nevertheless one of the ten key principles that underpin the Small Business Act (SBA), launched in June 2008 by the European Commission. Like the nine others though (internationalisation; environment; skills and innovation; single market; entrepreneurship; second chance; ‘think small first’ principle; support for administrations; and participation in public procurement), its implementation is patchy and sometimes slow in certain member states. An example is the JEREMIE financial instrument, which the employers’ organisation BusinessEurope criticises for its slowness. The European Association of Craft, Small and Medium-Sized Enterprises (UEAPME) adds that, according to one of its surveys, the average level of commitments has remained virtually unchanged compared with 2009, “demonstrating a very relative performance by member states”.

The Commission is aware of these weaknesses and plans to present a revision of the SBA, on 14 December, to take stock of the situation, to associate the SBA with the new ‘Europe 2020’ strategy and to assess governance issues.

EUROCHAMBRES SCEPTICAL

In spite of the Commission’s good intentions, Eurochambres voices disappointment with its recent communications more or less related to enterprises. The association representing chambers of commerce and industry voices perplexity over the recent communication on smart regulation, published on 8 October. The text should have addressed inclusion of the ‘SME test’ in policy making (study of the impact of new legislation on SMEs), also foreseen under the SBA, it claims. Instead, “the best we get is the extension of the consultation period from eight to 12 weeks,” notes Eurochambres President Alessandro Barberis.

The association is equally critical of the flagship ‘Innovation Union’ initiative, presented two days earlier. According to Eurochambres, the initiative focuses too much on research and not enough on innovation. “Research undeniably remains a vital element of innovation, but it is only one of many important ingredients,” states its Secretary-General, Arnaldo Abruzzini.

More generally, Christoph Leitl, honorary president of Eurochambres, president of the Austrian Federal Economic Chamber and president of the Global Chamber Platform, observes that the new European strategy for the coming decade is too abstract. “What will remain in 2020?” he asks. “In 2020, the European commissioners will no longer be in office and will have been replaced by their successors, who will not feel guilty for not having reached these targets. It may have been better to target 2015 or to set yearly targets that can be revised,” he declared. Leitl was also critical of the European Commission president’s failure to attend the Business Parliament, a “sign of the European Union’s lack of interest”.

BETWEEN OPTIMISM AND PESSIMISM

Alongside this pessimism, the draft communication on the single market, of which Europolitics obtained a copy, is creating strong expectations among SMEs. It gives pride of place to enterprises, with 26 of its 47 actions focused on the business world. The draft is clearly influenced by the Mario Monti report, which attaches importance to encouraging innovation and creating new economic models, easing rules and red tape, improving infrastructures and so on. The programme of actions in the draft, which covers a wide range of sectors, is meant to identify all bottlenecks in the single market with the aim of releasing its full potential and bringing back growth.

One of the subjects reviewed in the communication is access to financing, this time with concrete target dates. The Commission will review, by 2012, the conditions for improving the visibility of SMEs among investors; it will encourage the development of long-term savings and private investment in infrastructures and innovative projects, and by 2012, the use of European cross-border venture capital funds, without unfavourable tax treatment. It will also propose, in 2011, a legislative initiative on service concessions to improve access by companies and to foster public-private partnerships. Eurochambres encourages this effort: “Europe’s future prosperity and its integration depend on our capacity to remove existing barriers to a genuine single market of 500 million people”.