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Europe’s SMEs are stagnating rather than growing

Europe’s SMEs are stagnating rather than growing, says a new report. It says that while companies see stability they do not expect growth, at least not at a level that would motivate them to invest or to hire. These are the main findings of the UEAPME SME Business Climate Index. UEAPME is the employers’ organisation representing crafts, trades and SMEs from the EU. It has 80 members.

“In general we can say that Europe’s SMEs are in a wait and see mode and are still hesitating to invest and we also do not expect additional employment in the SME sector during the next month”, said Gerhard Huemer, Director of the UEAPME Study Unit.

The results come on the eve of a key summit of  EU leaders in Brussels on Thursday.

UEAPME says,  “The fact that the results are much less positive for the last semester than those expected six months ago contributes to a rather stagnating outlook.”

Meanwhile, the campaign to remove red tape and cut EU bureaucracy has secured a “major” victory when supporters won a series of votes in the European Parliament’s committee for the single market.

British Conservative MEP Vicky Ford, who chairs the committee, had tabled a number of proposals to remove unnecessary costs imposed by EU law.

She worked closely with Austrian Christian Democrat MEP Othmar Karas, the author of the report on better law-making which was before the committee.

The amendments passed included setting a 25% target for reducing the cost of bureaucracy and establishing a business forum to enable grassroots suggestions for reducing administrative burdens to be put forward.

The forum would be similar to the Business Taskforce on cutting EU Red Tape which has operated in the UK, and a similar initiative in Denmark.

The committee also backed Ford’s suggestions for a competitiveness test, so that if a draft law adds additional costs then it should be reconsidered, and requiring the Commission to produce an annual statement of new costs to business from EU law which would help to shed light on the problem of red tape.

A further set of amendments suggest that all impact assessments and product standards should be made public at a draft stage before they are finalised so that the public and stakeholders can give comments. This would cover areas like setting standards for electrical goods.

Ford said, “The single market is meant to help businesses trade across 28 countries but too often EU laws create unnecessary costs for businesses and consumers. This must stop.

“The campaign to cut red tape in Europe is gaining momentum.”

The amendments will now form part of an opinion sent from the committee to help shape the EU Commission’s so called REFIT programme on better regulation and cutting red tape.

By Martin Banks