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SMEs welcome new rules for state aid

UEAPME, the association of European SME employers, has praised the European Commission for its proposal to double the limit for 'de minimis' state aid to €200,000 over three years, and raise loan guarantee schemes for SMEs to €1.7 million.

SMEs - small and medi...

Policy making and guidelines

UEAPME, the association of European SME employers, has praised the European Commission for its proposal to double the limit for 'de minimis' state aid to €200,000 over three years, and raise loan guarantee schemes for SMEs to €1.7 million.

SMEs - small and medium-sized enterprises - often carry high technology or high innovation products and services to market more quickly than the bigger players. However, SMEs run far greater risks and have less access to funding.

The new rules mean that Member States can fund SMEs up to €200,000 over three years without the SME having to declare or notify that funding. The decision means that state aid below this figure is not considered an impediment to free trade.

The decision also raises the caps for loan guarantees. 'The new text will cover a vast majority of the existing schemes for SMEs, allowing them to benefit from substantial government loan guarantees without facing burdensome notification requirements,' said UEAPME secretary general, Hans-Werner Müller.

However, state aid rules vary from Member State to Member State. For example, the percentage covered by state loan guarantees in Germany is 50 per cent, which is lower than in other countries, where the typical limit is 80 per cent. UEAPME therefore suggests increased flexibility, so that in this case the loan guarantee limit could be raised to €2.7 million, which would offset the German SMEs' increased burden.

The importance of SMEs to the European economy was highlighted in the Aho group report 'Creating an Innovative Europe', published in January 2006, and in the increased prominence given to SMEs in the Seventh Framework Programme (FP7), where the target for SME participation is set at 15 per cent. The new rules will make life easier for SMEs, which represent the majority of the EU economy, accounting for up to 99 per cent of all European businesses.