Stimulating SMEs is a prerequisite to new growth in Europe.

The Small Business Act is a policy framework, originally adopted in June 2008, which aims at improving the overall conditions for SMEs throughout the different policy areas of the EU. It is currently being reviewed to take stock of what has happened since it was originally adopted and adjust it to the new challenges SMEs face, particularly as a result of the economic crisis. The Chairman of the SME Circle of the EPP Group, insists that the Small Business Act be adjusted so that it takes into account the fact that SMEs in particular have suffered from a drying-up of financial and economic resources as a result of the crisis. There is a need to focus on improving SME access to finance from grants, guarantees and equity financing, and to promote SME growth. "We must create a business-friendly climate for our SMEs", said Bendtsen( MEP) after the European Parliament's debate with Commissioner Olli Rehn on the review of the Small Business Act. Other priorities for The European Parliament and the EPP Group include a focus on how to reduce administrative burdens for SMEs. "We need to ensure that legislation is not 'gold-plated' with excessive demands when they are implemented, as well as making sure that demands for information are not duplicated," said the MEP. Striking a balance The European Parliament has prepared a motion for resolution, which will be voted on by the mid-july 2011. Among the topics dealt with in this resolution is the implementation of SME-related legislation, smart regulation, how to improve access to finance, access to markets, research and innovation, skills, education and professional training and how SMEs can contribute to a resource-efficient economy. "Small and Medium-sized Enterprises represent a huge part of the European economy. They differ from small, one-man-shops to larger family-owned businesses, from plumbers to technological start-ups that produce applications for your smart phone, to medical suppliers. What unites SMEs is a common difficulty with handling the

information demands from public authorities and their frustration with the need to hire expertise just to understand the technical and legal requirements they need to comply with in order to stay in business. The Small Business Act will help improve that and look at other things that hamper growth for SMEs," said the EPP spokesman. The main difficulty faced by lead MEPs is to strike a balance between stepping up the "automaticity" with which Member States reluctant to reform would have actions and sanctions imposed upon them, but allowing them to continue making investments that would be beneficial to their long-term health. The approved set of rules are tougher than what the Commission had proposed on "irresponsible" spending but, at the same time, they require the Commission to take note of "good" spending when judging a country's reform efforts. On debt reduction, a Member State with debt above 60% of GDP would need to reduce its excess debt by an average of 5% per year over a three-year period, whereas the Commission had proposed a fixed 5% per year, over a three year period. On budget-setting standards, the committee text pushes for tougher fiscal rules to apply to euro zone members. The package if approved, also calls on the Commission to table reports by the end of this year on establishing a system of common issuance of European sovereign bonds and establishing a European Monetary Fund under EU rules.

Date: 6/19/2011

Mircea Halaciuga, Esq. 0040724581078 Financial news - Eastern Europe