MEP to highlight need for more risk capital for SMEs
Although progress has been made in the removal of obstacles for SMES (small and medium sized enterprises) seeking risk capital, more still needs to be done according to MEP Peter Skinner. In response to this situation, he has tabled a draft resolution highlighting the issues involved. Tabled on behalf of the European Parliament's Economic and monetary affairs committee, the draft resolution proposes a raft of measures which would address the difficulties encountered by new companies. Venture capital companies should benefit from the same tax breaks as other businesses, provision of stock option schemes for employees, risks being recognised through a favourable treatment of capital gains and a more tolerant attitude towards bankruptcy are all required, according to Mr Skinner. It also suggests that the European investment bank could take a more active role in promotion of the conditions for SMEs and innovation through its European investment fund. Without these types of measures, the resolution argues, the goal of making Europe the most competitive knowledge based economy in the world by 2010 will become increasingly difficult. While some progress has been made under the European Commission's Risk capital action plan, especially through removing tax and bureaucratic obstacles to raising venture capital, statistics show that there remains a lot to do. In the first half of 2001, venture capital investment in Europe fell by 27 per cent and remains a long way behind the level seen in the USA. In addition, access to finance has been shown to be the most serious obstacle in encouraging the formation of new companies. The debate on the resolution is planned for 10 April, just one day before the European Commission is due to present the results of its work looking into support services for small businesses. The two new documents 'creating top class business support services' and a study on 'support services for micro, small and sole proprietor businesses' will be presented in Vienna, Austria on 11 and 12 April.