The European Commission has adopted a communication on the prospects and possible obstacles to the progress of European capital markets for SMEs, with the aim of continuing its efforts to stimulate the creation and development of such markets. The communication aims to: - Explore the potential barriers to the listing of SMEs on capital markets; - Start a Europe-wide debate on the appropriate conditions for access to equity finance; - Describe and draw attention to the progress made by various initiatives in the EU such as EASDAQ and Euro-NM; - Outline the actions the Commission is currently taking and is planning to take to overcome the barriers to the development of SME-oriented capital markets and ensure their smooth operation. Raising capital on European markets is one of the biggest problems faced by European SMEs trying to expand. The liberalization of European capital markets has made a number of encouraging and promising initiatives possible. However, a number of issues still need to be addressed, in order that an effective, liquid and financially viable capital market for SMEs may be created. This will contribute towards exploiting the job creation and economic growth potential of fast-growing SMEs. Commissioner Christos Papoutsis, responsible for enterprise policy, acknowledged the importance of SMEs for job creation and growth. "All efforts should be made", he said, "in order to establish a genuine SME equity culture in Europe". The communication identifies two main areas of potential barriers to the development of SME-oriented capital markets. Firstly, the attitudes, capacities and constraints within SMEs themselves. To address this, the Commission proposes a number of actions to raise awareness and educate entrepreneurs about stock market listings. Secondly, the Commission has identified a number of obstacles relating to cross-border trading in such stocks, and differences in currencies, taxation and accountancy practices. The full implementation of existing Community legislation would go some way towards reducing these barriers, and to that end, it makes a number of recommendations. The Commission also notes that in the event of failure to remove such discriminatory restrictions, the possibility of using infringement procedures exists.