Small firms top of EU agenda

THE EUROPEAN Commission has admitted that red tape must be cut to help small businesses.

Enterprise Commissioner Gunter Verheugen said yesterday that nothing less than a 25% cut in red tape was required to free up entrepreneurs to deliver the economic results the EU needed.

He added that small businesses are at the top of the political agenda and at the centre of EU policy- making.

“At a time of great economic challenges the Commission is putting the needs of small business at the heart of everything we do,” Mr Verheugen told a conference of SMEs in Brussels.

He said rules were vital for a smooth-running economy, but so was a determination to strip away bad law and create “intelligent” regulations to help business confidence.

Reducing by a quarter the bureaucracy hampering small businesses was not only desirable but possible, said the Commissioner.

And it could make a huge difference to the jobs market: the Commission estimates that more than 10% of one-person businesses would recruit staff if they faced less red tape. And as solo enterprises make up more than half of all businesses in the EU, that could translate into 1.5 million new jobs.

Yesterday’s conference was told that the Commission is actively pushing its “SME Charter” — a pledge to streamline regulations and banish unnecessary laws, and to encourage national and regional SME exchanges of best business practice.

“In the past the EU’s 23 million SMEs often only made it into the footnotes of political speeches.” said a Commission report.

“Now they are gaining the recognition they deserve. Micro-businesses are the real giants of the European economy.”

Figures show that 91% of all European firms are micro-businesses, employing between 1-9 staff. Small firms — 10-49 workers — make up another 7%, and medium-sized firms, with up to 250 employees, account for another 1% of the total.

Taken together as SMEs, these three categories, accounting for 99% of all businesses, employ 75 million people and, in sectors such as textiles and construction, account for more than 80% of the total workforce.