9.5.2006   

EN

Official Journal of the European Union

C 110/39

1.1

The European Economic and Social Committee welcomes the Commission document presenting the JEREMIE programme (1) (Joint European Resources for Micro-to-Medium Enterprises) with keen interest.

1.1.1

The Committee is grateful to Danuta Hübner, Commissioner responsible for regional policy, as well as DG Regio and the EIF, for the efforts they are making in developing this delicate programme and for the support they have given to the Committee's work.

1.1.2

The EESC has always supported Commission initiatives to facilitate access to credit for micro-enterprises and SMEs, being convinced — as is the European Parliament — that aspect has always represented a weak point for smaller businesses.

1.1.3

Strengthening small businesses represents a fundamental element in the Lisbon strategy, since it ties in with innovation, generates stable employment and contributes to the ongoing training of the workforce.

1.1.4

In numerous opinions, and especially those drawn up since 1982 (2), the EESC has highlighted the efforts made by the Commission, DG XXIII (3) in particular, to help businesses improve their links with the credit system, particularly banks.

1.1.5

The EESC has also emphasised the need for the broad-based involvement of the social partners in all enterprise-related problems and, in particular, those concerning credit, since they have a considerable impact on social well-being and development.

1.2

Throughout the 1990s, DG XXIII (4) sought to act on credit problems, working in close contact with organisations representing the crafts sector and SMEs. The successive European Conferences of Crafts and Small Businesses (SME) (5) and the numerous preparatory meetings (an average of 10 in the run-up to each conference, attended by hundreds of small businesses) have:

1.2.1

On the basis of the experience outlined above, the EESC believes that it would be appropriate, not least in view of the new programming for 2007-2013 and the Lisbon objectives, to provide more information on the new programmes, especially those aimed at micro and small enterprises, by holding meetings in the Member States with representatives of the social partners and civil society.

1.2.2

However, in spite of the interventions and efforts organised over the last 20 years, many regions in the EU-25, especially the most disadvantaged ones, lack a project capable of coordinating and fine-tuning the many loan instruments currently in existence.

1.2.2.1

Close to four million businesses — 20 % of those in existence — judge that poor access to finance is a serious barrier to their growth (9).

1.2.2.2

Only a few tens of thousands of undertakings have been able to use Community financial instruments (10), revealing the yawning gap between the way the issue is presented and the practical results. This prompts consideration of the practical possibilities of intervening with systems which can boost the involvement of financial institutions and amplify the results.

1.2.2.3

The EESC is aware of the need to step up efforts to improve the information on credit opportunities provided by the Commission, the EIB, EIF, EBRD and national and regional authorities. Micro and small enterprises are very often excluded –in part, moreover, through their own fault — from channels of information.

1.3

JEREMIE could therefore be put forward as a ‘smart’ tool for coordinating and rationalising existing opportunities.

1.3.1

The JEREMIE initiative falls within the scope of the Cohesion Policy in Support of Growth and Jobs: Community Strategic Guidelines. The Committee's position on this may be summarised as follows:

1.3.2

The Committee emphasises the importance of Commission support for the JEREMIE initiative not only outwardly, but also through internal coordination between services managing actions to support micro, small- and medium-sized enterprises, by setting up a ‘JEREMIE focal point’ to serve as a unit informing and coordinating between the various actions in order to optimise the results.

1.3.3

The EESC believes that the Commission should provide a report every two years to the European Parliament, the Council, the Committee of the Regions and to the European Economic and Social Committee on the progress and efficacy of the programme, with a view to extending this important experience to other sectors.

1.3.4

Lastly, the Committee recommends that full compliance with the principles of economy, efficiency and transparency be ensured in tendering and selection procedures, management of the regional holding funds and accreditation of the financial intermediaries charged with project management. In particular, full compliance with the relevant Community legislation must be ensured, even in cases of exclusive rights. It must be possible to impose penalties, dismiss inefficient holding funds and revise the lists of accredited financial intermediaries.

2.1

The EESC has repeatedly underlined the role — not only economic, but also social — played by small businesses in their respective Member States, and has drawn specific attention to this in several opinions, including those issued in 1992 (13), 1997 (14), 2001 (15) and 2003 (16), together with others on the European Charter for Small Enterprises (17).

2.1.1

Micro and small businesses perform an essential role in the European economy. They number some 25 million, represent 99 % of all businesses and employ nearly 95 million people, providing 55 % of all jobs in the private sector (18).

2.1.2

These figures highlight the importance and the role of SMEs in the Lisbon strategy, as well as the need to establish a strong partnership with the representatives of the social partners, in order to be in a position to generate new forms of cooperation (19). Their purpose is to put into practice the social and economic values underpinning Europe's social market economy (20).

2.1.3

The main problems affecting the start-up and development phases of micro and small businesses are, in order of importance:

2.1.4

Access to credit is therefore a precondition for setting up a business, and is a fundamental requirement for the growth and development of micro and small businesses, who feel the restrictive effects of the credit system more clearly and more strongly than large companies.

2.1.5

Direct contact with businesses and their problems, and an understanding on their part of the opportunities provided by the credit system — especially those located in the areas where the businesses are operating — is the only way to harness the positive effects of credit. This will prevent excessive inflexibility in funding arrangements and the ensuing increase in risk, with regard inter alia to developments concerning the Basle Agreements. Businesses must therefore find their own financial balance and identify the necessary tools.

2.1.6

Self-financing plays a key role, even if small companies can rarely achieve their own investment plans with this instrument. The following are necessary in 90 % of cases:

2.1.7

Among these instruments, risk capital is often mistrusted by small enterprises. Only 5 or 6 % of the myriad micro (21) and small (22) businesses (90 % of which are individual companies or partnerships) make use of venture capital. If take-up is not to remain negligible, new forms of venture capital must be devised which can also apply to individual companies.

2.1.8

The priorities identified to bridge the gap between finance and small enterprises can be summarised as follows:

2.1.9

The analyses and evaluations of needs and potential, under the JEREMIE preparatory phase, should be carried out in individual EU regions with the real involvement of the relevant economic and social partners, as part of an effective and responsible partnership.

2.2.1

The degree of difficulty in gaining access to loans, outlined above, varies according to the level of economic and market development. The convergence regions (25), which have the greatest need of credit instruments in order to boost employment through entrepreneurship, are in fact those where access to credit is most difficult, and where interest rates are higher than those applied in more developed regions (26).

2.2.2

EIB loans, granted in rotation (27) to trustee banks to be divided among SMEs at variable, but limited, rates (28), are used primarily by banks operating in developed regions, where competition between banks is greater and granting EIB loans is a means of keeping loyal customers.

2.2.3

Since there are few banks, especially of the cooperative or popular credit type, in the less developed regions, there is less competition in the banking sector and little awareness of small operators: as a result, it is rare that the valuable instruments provided by the EIB are used in such regions.

2.2.4

In short, if efforts are not made to reverse this trend, in part by the financial mediation of those tools which JEREMIE can deploy alongside the more conventional EIB and EIF ones (29), the poorer regions will be condemned to continuing long-term poverty.

2.2.5

In order to provide loan back-up, especially in the convergence regions, a JEREMIE desk could be organised at the EIF with the task of supporting guarantees on bank loans with surety instruments, via credit consortia or other bodies which are active in the less advantaged regions in particular.

2.3.1

The problem of access to credit for micro-businesses, as well as SMEs, puts the spotlight on a number of market shortcomings:

2.3.2

The aim therefore is to make up for market shortcomings with actions which:

2.3.3

The Lisbon strategy was relaunched at the March 2005 European Council, and the governments and economic and social partners were urged to act in three priority areas:

2.3.4

The Member States' expenditure on supporting employment and job creation is sometimes considerable, but is justified by the social results (31). In the event of a universal loan of EUR 20 000 to half of the EU-25's SMEs — i.e. some 12 million businesses — the probable losses due to insolvency (32) would not exceed EUR 6.5 billion, representing 0.07 % of EU-25 GDP; at the same time, granting loans across the board would enable most enterprises to consolidate their position and to innovate with regard to their processes and products.

2.3.5

If loans were granted through the intermediary of loan consortia, capable of absorbing 50 % of insolvencies, the losses would be shared equally (50-50) between the relevant consortium and bank.

2.3.6

A culture of accepting that credit has a social function enables the necessary financial engineering tools to be developed with a contribution from public funds, European funds and solidarity funds contributed to loan consortia by businesses themselves, either when registering with a consortium or in the form of a percentage of bank interest (33).

2.4.1

Granting large numbers of small loans, as required by business start-ups and by European micro and small enterprises, is subject to:

2.4.2

Some solutions to these problems can be found in existing instruments, which should however be put to better and more extensive use:

2.5.1

Over the last few years in particular, the multiplier instrument has been analysed and used by both credit consortia and banks to boost credit possibilities (37). Rigorous analysis of the insolvencies picture, especially in the convergence regions, allows the multiplier to be adjusted to match the local situation. The percentage of insolvencies of course rises in the most disadvantaged regions, where it can reach 10 %, while in the richer regions, the failure rate for micro and small businesses is of the order of 2.5 %.

2.5.2

JEREMIE can realise its potential primarily in the convergence regions, providing credit consortia with personal guarantees and facilitating securitisation processes, in order to increase credit opportunities and offset the weakness of the multiplier.

2.6.1

The Competitiveness and Innovation Framework Programme (2007-2013) (38) brings together various Community measures and programmes, including the following:

2.6.2

There should also be an analysis of the financial instruments included in the Fourth multiannual programme (MAP) (2000-2005), extended until 31.12.2006), with a budget of EUR 531.5 million (47), which is to be incorporated into the CIP and come under the JEREMIE strategy.

2.6.2.1

The MAP is organised around three pillars:

2.6.2.2

An analysis of how the MAP financial instruments have operated reveals which have given the best results and which may consequently be incorporated into the JEREMIE strategy. These instruments are by far the largest item of expenditure under the fourth MAP: in 2003, for example, they accounted for 67 % of the programme's total budget (48). Resources are distributed within these financial instruments as follows:

2.6.2.3

These instruments were previously used, in 1998-2000, under the programme of initiatives for growth and employment, alongside others:

2.6.2.4

Neither SCA nor JEV have yet yielded much by way of results.

2.6.2.5

Approximately 178 000 SMEs had availed of the SME-Guarantee instrument by the end of 2003 (53) (136 000 under the growth and employment programme, 32 000 under the credit guarantee programme and 10 000 with the micro-credit programme).

2.6.2.6

During the same period, some 240 000 SMEs (54) had benefited from the ETF Start-up programme.

2.6.3

JEREMIE could therefore continue disseminating experience with these two financial instruments, increasing the number of beneficiary SMEs, especially in the convergence regions.

2.6.4

It should be borne in mind that only 0.81 % of European SMEs have, during these years, benefited from joint DG Enterprise, DG Economic and Financial Affairs and EIF interventions.

2.6.5

It is, however, important that JEREMIE should explore new paths, including those envisaged by the new programmes, in the following areas in particular:

2.6.6

The EESC is however convinced that these interventions suffer from a major problem of information and training: the solution should involve the financial institutions, and organisations representing employees and workers, governed by the principles of corporate social responsibility and the social purpose of credit.

2.7.1

It is in the Committee's view vital that Community legislation on public service tendering be complied with in full, in order to guarantee that the JEREMIE initiative succeeds.

2.7.2

In any case, the Commission's JEREMIE department and/or the EIF must guarantee that the tendering procedures comply with the principles of economy, efficiency, impartiality, equal treatment and transparency. The contract documents, drawn up in advance by the Commission, must in particular contain among the eligibility criteria for companies or consortia wishing to take part, the following:

2.7.2.1

In the event of holding fund/2007-2015 operational programme agreements, there must be provision for penalties, revocation and dismissal of a holding fund on the grounds of inefficiency, irregularity or serious failures to fulfil obligations. Management should be monitored at two-yearly intervals, with the support of regional economic and social partners, with transparent procedures for the publication of reports, which should be forwarded to the central national authorities, the European Parliament, the EESC and the Committee of the Regions.

2.7.3

Financial entities or consortia established in another Member State or in one of the countries which has signed the agreement on public contracts, as set out in the Annex to the WTO Agreement must be allowed to qualify under the same conditions as those applied to national participants, on the basis of documents complying with the legislation of the countries in question, which demonstrate that all the requirements for qualification are met.

2.7.4

These provisions should also apply to the accreditation procedures for intermediary credit institutions: these must be subject to systematic performance monitoring arrangements, defined in conjunction with representatives of the relevant economic and social partners, and also to a periodic accreditation review. In all cases, replacement of part of the accredited elements must be ensured every three years.