Brussels, 7.12.2004

COM(2004) 781 final

2004/0272 (COD)

.

Proposal for a

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Council Decision 2000/819/EC on a multiannual programme for enterprise and entrepreneurship, and in particular for small and medium-sized enterprises (SMEs) (2001-2005)

.

(presented by the Commission)

EXPLANATORY MEMORANDUM

1. The multiannual programme (MAP) for enterprise and entrepreneurship, and in particular for small and medium-sized enterprises (SMEs) was adopted on 20 December 2000 to run from 1 January 2001 to 31 December 2005, with a budget of 450 million euro.

2. The MAP aims to achieve the following objectives:

- to enhance the growth and competitiveness of enterprises in a knowledge-based and internationalised economy;

- to promote entrepreneurship;

- to simplify and improve the administrative and regulatory framework for business so that research, innovation and business creation can flourish;

- to improve the financial environment for business, especially SMEs;

- to give business easier access to Community support services, programmes and networks and to improve the co-ordination of these facilities; and

- to support the implementation of the European Charter for Small Enterprises at Community level.

3. The MAP is implemented through 3 types of delivery instruments:

- the exchange of experience and the identification of good practices between the Member States;

- the operation of a network of Euro-Info-Centres offering services and advice about European matters to enterprises throughout European regions;

- the provision, via the European Investment Fund (EIF), of a number of Community financial instruments for SMEs.

4. An external evaluation of the MAP was carried out by independent experts. The experts confirmed that the MAP has met its overall objectives and that its delivery instruments have been effective:

- The Community financial instruments for SMEs were found to have successfully contributed to facilitating SMEs’ access to finance. They address recognised market gaps or market failures which will continue to exist despite the market integration for financial services. However, evaluations have shown that excessive targeting of Community financial instruments for SMEs at special sectors of the economy or at certain policy goals can limit their acceptance in the market place. In addition, greater visibility for the Community financial instruments should be achieved. The role of the EIF in the operation of Community financial instruments for SMEs on a demand-led basis has been considered a best practice.

- The evaluations have verified the positive role of the Euro-Info-Centres Network in providing business support services to SMEs. However, it was suggested that the transversal role of the Euro-Info-Centres Network in the delivery of the programme should be strengthened, for example in the dissemination of programme activities and results.

- It was suggested that the exchange of experience and the identification of good practices between the Member States with a view to improving the environment for entrepreneurship and enterprise become more focussed. Also, monitoring of the follow-up activities carried out by the Member States would enhance its effectiveness.

5. The implementation of the MAP has been subject to regular evaluations. One of them concerned the Joint European Venture (JEV) programme which was part of the Growth and Employment Initiative adopted by the Council in 1998 and which was integrated into the MAP end of 2000, however, without an additional budget. The 2003 evaluation report on the Growth and Employment Initiative indicated poor cost effectiveness and low market demand for the JEV programme and prompted the Commission to propose amending the MAP so that JEV could be phased out. The respective programme amendment was adopted by a decision of the European Parliament and of the Council on 21 July 2004.[1]

6. A public consultation on possible elements of a future support programme for entrepreneurship and enterprise competitiveness, to succeed the MAP, was carried out by the Commission from March to May 2004. This consultation indicated strong support for a wider basis for policy analyses, development and co-ordination as well as for specific measures to help enterprises to be competitive and innovative.

7. The proposed successor programme would have began in 2006, under the current financial perspective, and ended in 2010, the target date for achieving the ambitious objectives set by the Lisbon agenda. The challenge for the new programme would therefore be to contribute to competitiveness in a more comprehensive way than achieved by the MAP. Subsequent to the evaluation and the public consultation, the Commission decided that a framework programme would have the greatest potential to boost innovation and competitiveness. The Commission therefore proposed, in a Communication of 14th July 2004[2] to prepare such a framework programme in the context of the new financial perspective (2007-13). The framework programme will provide the means and instruments for implementing policies in varied fields influencing European competitiveness. This would include:

- Improving the business environment (access to investment capital; secure electronic networks; the effective delivery of EU-wide business services; and modernised services through the use of ICTs).

- Ensuring that innovation works to promote competitiveness and is carried through into practical application at a business level. (Synergies with the Framework Programme for Research “Technological platforms”, environmental technology, renewable energy, working through the Intelligent Energy Agency).

- Backing up European policy on enterprise competitiveness, innovation, entrepreneurship and SMEs with policy expertise and the promotion of EU action.

8. It is not possible to present such a Commission proposal for a framework programme on innovation and competitiveness in 2004 in order to ensure its operation as of 1 January 2006. The framework programme for innovation and competitiveness should also dovetail with the 7th Framework Programme for Research. Consequently, both new framework programmes should start consecutively on 1 January 2007.

9. Nevertheless, it is essential to ensure continuity of Community support for the improvement of the business environment and for the growth and competitiveness of enterprises, in particular SMEs. It is therefore important to avoid any disruption of the instruments operated under the MAP. In view of these circumstances, the Commission proposes that the current programme, as amended in 2004, should be prolonged until 31 December 2006. This will enable the Commission to present a proposal for a Community framework programme on innovation and competitiveness as soon as possible.

10. The European Commission therefore proposes:

- to prolong the MAP until 31 December 2006;

- to increase the financial reference amount by EUR 81.5 million.

- 2004/0272 (COD)

Proposal for a

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

amending Council Decision 2000/819/EC on a multiannual programme for enterprise and entrepreneurship, and in particular for small and medium-sized enterprises (SMEs) (2001-2005)

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 157(3) thereof,

Having regard to the proposal from the Commission[3],

Having regard to the opinion of the European Economic and Social Committee[4],

Having regard to the opinion of the Committee of the Regions[5],

Acting in accordance with the procedure laid down in Article 251 of the Treaty[6],

Whereas:

(1) It is essential to ensure the continuity of Community support for enterprise and entrepreneurship, and in particular for small and medium sized enterprises (SMEs).

(2) It is therefore appropriate to extend the period of validity of Council Decision 2000/819/EC[7] with another year until 31 December 2006 and increase the financial reference amount by EUR 81.5 million.

(3) Decision 2000/819/EC should be amended accordingly,

HAVE DECIDED AS FOLLOWS:

Article 1

Decision 2000/819/EC is amended as follows:

(1) In Article 7(1), the financial reference amount of EUR 450 million is replaced by EUR 531.5 million.

(2) In Article 8, the date of 31 December 2005 is replaced by that of 31 December 2006.

Article 2

This Decision shall enter into force on the day of its publication in the Official Journal of the European Union.

Done at Brussels, […]

For the European Parliament For the Council

The President The President

LEGISLATIVE FINANCIAL STATEMENT

+++++ TABLE +++++

1. BUDGET LINES + HEADINGS

The following existing budget lines:

010405: Improvement of the financial environment for SMEs;

02020301: Multiannual Programme for Enterprise and Entrepreneurship, and in particular for SMEs;

02010404: Administrative support;

2. OVERALL FIGURES

2.1 Total allocation for action (Part B):

€ 81.5 million for commitment

This amount represents the budgetary impact of the proposal to prolong the existing programme, which is due to end on 31 December 2005, for the additional year to 31 December 2006.

2.2 Period of application: 1st January 2006 - 31st December 2006

Payment appropriations may extend beyond the end of the legal base until 31 December 2008.

2.3 Overall multiannual estimate of expenditure:

a) Schedule of commitment appropriations/payment appropriations (financial intervention) (see point 6.1.1)

€ million (to three decimal places)

+++++ TABLE +++++

b) Technical and administrative assistance and support expenditure (see point 6.1.2)

+++++ TABLE +++++

c) Overall financial impact of human resources and other administrative expenditure (see points 7.2 and 7.3)

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2.4 Compatibility with financial programming and financial perspective

[ X ] Proposal is compatible with existing financial programming.

[..] Proposal will entail reprogramming of the relevant headings in the financial perspective.

[..] Proposal may require application of the provisions of the Interinstitutional Agreement.

2.5 Financial impact on revenue

[X] Proposal has no financial implications (involves technical aspects regarding implementation of a measure).

[..] Proposal has financial impact.

3. BUDGET CHARACTERISTICS

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6.1.2 Technical and administrative assistance, support expenditure and IT expenditure (commitment appropriations)

+++++ TABLE +++++

6.2. Calculation of costs by measure envisaged in Part B (over the entire programming period)

Commitment appropriations in € million (to three decimal places)

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+++++ TABLE +++++

* JEV has been phased out under Decision 593/2004/EC of 21/07/2004.

Nota bene : Open Method of Co-ordination between participating countries will normally include expert meetings, analyses, seminars and publications.

7. IMPACT ON STAFF AND ADMINISTRATIVE EXPENDITURE

The needs for human and administrative resources shall be covered within the allocation granted to the managing DG in the framework of the annual allocation procedure.

7.1. Impact on human resources

+++++ TABLE +++++

The estimates provided in the above table are based on current human resources involved in management or co-ordination of MAP actions. The figures exclude human resources from horizontal resources services.

At present 67 people (equivalent full time) are involved in implementing the multiannual programme for enterprise and entrepreneurship (2001-2005) within DG Enterprise (35 grade A, 10 grade B and 22 grade C). In addition, central support services for the Euro-Info-Centres Network (as provided for by Council Decision 2000/819/EC on the MAP) employ 52 people in benefit of the Network. 6 further staff members (3 grade A; 3 grade B) work in DG ECFIN on the execution of the Community financial instruments for SMEs by the EIF requiring monitoring during and beyond the programme duration on the Commission side.

7.2 Overall financial impact of human resources

+++++ TABLE +++++

The amounts are total expenditure for twelve months.

7.3 Other operating expenditure deriving from the action

+++++ TABLE +++++

The amounts are total expenditure for 12 months.

+++++ TABLE +++++

8. FOLLOW-UP AND EVALUATION

8.1 Follow-up arrangements

Following the adoption of this Decision, the management of the programme actions will continue to be based on an annual programming cycle. The Commission will establish, in consultation with the Enterprise Programme Management Committee (EPMC), the 2006 annual work programmes including specific, appropriate and coherent performance indicators for the deliverables (quality and quantity), implementation and effectiveness. Each action will be explicitly linked to one or more stated objectives of the programme.

The performance of the programme will be scrutinised by the Management Committee which will meet 3 or 4 times in the year. As has been the case thus far, the EPMC will receive an annual Implementation Report, covering implementation and budget execution. The Implementation Report will also be made available to the European Parliament and general public.

8.2 Arrangements and schedule for evaluation

An independent external final evaluation of the actions carried out under the MAP has been carried out in accordance with Council Decision 2000/819/EC (Article 5) and will be transmitted to the European Parliament and the Council. The recommendations of the evaluation will be taken into account in the proposed period of extension.

9. ANTI-FRAUD MEASURES

(Article 3(4) of the Financial Regulation: "In order to prevent risk of fraud or irregularity, the Commission shall record in the financial statement any information regarding existing and planned fraud prevention and protection measures.")

There are no (internal or external) audit reports giving raise to indications for fraud underthe activities undertaken in pursuance of Council Decision 2000/819/EC.

Verification before payment of subsidies or the delivery of services and studies ordered and carried out by Commission services will take place, taking into account the contractual obligations and the principles of economy and sound financial and global management. All contracts, conventions and legal undertakings concluded between the Commission and the beneficiaries under the programme foresee the possibility of an audit at the premises of the beneficiary by the Commission’s services or by the Court of Auditors, as well as the possibility of requiring the beneficiaries to provide all relevant documents and data concerning expenses relating to such contracts, conventions or legal undertakings up to 5 years after the contractual period. Beneficiaries are subject to the requirement to provide reports and financial accounts, which are analysed as to the eligibility of the costs and the content, in line with the rules on Community financing and taking account of contractual obligations, economic principles and good financial management.

[1] OJ L 268, 16.8.2004, p. 3-5.

[2] COM(2004) 487 final.

[3] OJ C […], […], p. […].

[4] OJ C […], […], p. […].

[5] OJ C […], […], p. […].

[6] OJ C […], […], p. […].

[7] OJ L 333, 29.12.2000, p. 84. Decision as last amended by Decision No 593/2004/EC of the European Parliament and of the Council (OJ L 268, 16.8 2004, p. 3).

[8] OJ L268 of 16/08/2004, pp. 3-5.

[9] Flash Eurobarometer, Nov 2002.

[10] SEC(2004)1460

[11] OJ L11 of 16.1.2003, p.1

[12] Enterprise Policy Management Committee (EPMC)