Commission acts to tighten up definition of SMEs
Following a year of analysis from the business community, DG Enterprise and public input, the Commission has launched a second external consultation on the definition to be given to SMEs (small and medium sized enterprises). The first public consultation took place in the autumn of 2001 and now Enterprise Commissioner Erkki Liikanen has requested that a second consultation should take place on the new draft texts, despite a broad consensus on the reasons for redefinition of the term 'SME'. The consultation relates to the definition of 'SME' proposed by the Commission in a 1996 recommendation. The preliminary draft Commission recommendation highlights the need to give a more refined definition to micro enterprises, to adapt the previous SME definition to economic developments, to take into consideration difficulties which have arisen in interpretations of the previous definition and to update this definition to take into account changes in prices and productivity. The text also highlights the need to ensure that the micro are not penalised and that larger enterprises do not benefit from measures intended for smaller ones. Simplification and speeding up of administrative procedures are also called for. The main benefit for the Community in general would be a clearer means of defining SMEs so that data concerning the 20 million enterprises in the EU can be more specific and more comparable. The preliminary draft of the communication from the Commission emphasises that more innovation and investment will be promoted through a clearer legal definition of SMEs. It also points out that this model should be the lead by helping to ensure that any other models in the 15 Member States take its characteristics into account, thereby ensuring that major differences in interpretation are not possible.