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17.2.2.  The business environment in the EU

    In the run-up to the completion of the single market the European Community/Union has endeavoured in particular to remove any obstacles to cross-border business activity, so as to help companies take advantage of new commercial opportunities on partner countries markets and, in general, to improve the environment in which Union business operates. Nevertheless, because of the complex nature of certain European provisions and inadequate knowledge of the European legislation concerned [see section 3.3], businessmen often regard that legislation as an impediment to the entrepreneurial spirit. The European Union should therefore ensure that the impact of its legislation on enterprises, in particular SMEs, is not in conflict with the common objective of seeing enterprises reach their full development in the single market.

    The European institutions try, indeed, to take into account the problems and conditions which are specific to SMEs when drawing up and implementing common policies (regional, social, research, environment, etc.). All proposals presented by the Commission to the Council and the Parliament are accompanied by an impact assessment describing their likely effects on businesses, in particular small and medium-sized enterprises, and on job creation. Through the "impact assessment method", the Commission analyses the direct and indirect implications of a proposed measure (e.g. concerning businesses, trade, employment, the environment and health). The results of each assessment are made public [COM/2002/276]. The impact assessment also gives details of the consultations that have taken place with the trade organisations concerned by the proposal [Council Resolution]. The Union's legislative authorities are thus kept fully informed of the implications of a proposal on business and employment [see section 4.3].

    It is advisable, however, to ensure that Member States do not complicate matters when transposing European legislation into national law. Therefore, the Council recommended to the Member States to implement programmes of administrative simplification covering both new legislative proposals and existing legislation and to examine the impact of all proposed legislation or rules on the administrative burden on enterprises [Council Recommendation]. In a resolution on realising the full potential of SMEs, the Council called on the Member States and the Commission to examine how the business environment for SMEs could be improved by removing the structural impediments resulting from the legal, financial and administrative framework [Council Resolution].

    In order to improve the European business environment, a directive aims at combating late payment in commercial transactions in the public as well as the private sector [Directive 2011/7]. Under the new rules, a creditor is entitled to interest for late payment from the day following the date or the end of the period for payment fixed in the contract. When interest for late payment becomes payable, the creditor is entitled to obtain from the debtor, as a minimum, a fixed sum of EUR 40, as well as compensation for expenses, such as those incurred in instructing a lawyer or employing a debt collection agency.

    The European legislation and programs as well as business opportunities on the large European market are still not well known by businesses. This is why, the Enterprise Europe Network, which is a part of the EU's Competitiveness and Innovation Framework Programme (CIP) [see section 17.1.3] offers support and advice to businesses across Europe and helps them make the most of the opportunities in the European Union. The Network is made up of 600 local contact points employing a total of nearly 3 000 experienced staff in more than 40 countries. Most partners in the Network are operated by consortia of qualified regional organisations such as chambers of commerce, regional development agencies and university technology centres. The services of the Network are specifically designed for small and medium enterprises (SMEs) but are also available to all businesses, research centres and Universities across Europe. These services include information on EU legislation, finding a business partner, benefit from innovation networks in a region and, last but not least, funding opportunities for businesses.

    By their nature it is generally more difficult for smaller enterprises to participate in research and development programmes (R & D). Firstly, the administrative costs of applying to participate and organising the required cooperation are relatively high for SMEs and, secondly, they do not have the same facility of access to long-term finance as larger companies. On the other hand, small businesses often have greater flexibility, creativity and dynamism, characteristics which qualify them well to contribute to the innovative process. Therefore the Framework Programme for Research and Innovation (2014-2020) encourages research activities involving SMEs [Regulation 1291/2013, see section 18.4.2]. Specific schemes for SMEs exist in the form of actions on collective and cooperative research. In addition, SMEs participate, for the most part, in the activities implemented under the priority thematic areas of research within networks of excellence, integrated projects and specific targeted research projects. Joint actions for innovation and SMEs aim notably: at the rationalisation and coordination of networks providing information and assistance on the Union's research and innovation activities such as the CORDIS information service; provision of information and advice; access to private finance; the creation of innovative start-ups, principally via European organisations and funds (European Investment Fund, European Investment Bank, and the European Regional Development Fund) [see also section 17.2.3].

    Several recommendations of the Commission, addressed to the Member States, aim at improving the business environment for European SMEs. In order to make it easier for non-incorporated SMEs to finance themselves the Commission recommended to the Member States to set the tax burden on reinvested earnings, in the case of sole proprietorships, at the same level as that applied to non-distributed corporate income [Recommendation 94/390]. Taking account of the fact that 10% of business closures in the European Union have their origin in a badly administered inheritance, the Commission, in a Recommendation on the transfer of enterprises, advocated changes in the law of succession and easing the taxation burden, in order to facilitate the continuity of enterprises and the jobs which go with them [Recommendation 94/1069]. In order to improve and simplify the environment for starting up business, a Commission Recommendation invited the Member States to reduce the fiscal, social, environmental and statistical burdens imposed on business start-ups [Recommendation 97/344]. The Committee for improving and simplifying the environment for enterprises, consisting of representatives of the Member States and representatives of SMEs at European level is charged with carrying out consultations on legislative and administrative provisions which hamper the creation, growth and transfer of enterprises, e.g. in the fields of financial instruments, capital markets, internationalisation of activities and statistical reporting obligations [Council Resolution]. A Recommendation of the Commission  encourages Member States to put in place a framework that enables the efficient restructuring of viable enterprises in financial difficulty and give honest entrepreneurs a second chance, thereby promoting entrepreneurship, investment and employment and contributing to reducing the obstacles to the smooth functioning of the internal market [Recommendation 2014/135].

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    Your roadmap in the maze of the European Union.

    Based on the book of Nicholas Moussis:
    Access to European Union law, economics, policies
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