Tag Archives: Job creation

State aid for employment

State aid for employment

Outline of the Community (European Union) legislation about State aid for employment

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > Job creation measures

State aid for employment

State aid for job creation and aid to promote the recruitment of disadvantaged and disabled workers are exempt from any obligation to notify.

Document or Iniciative

Commission Regulation (EC) No 2204/2002 of 12 December 2002 on the application of Articles 87 and 88 of the EC Treaty to State aid for employment. [See amending acts].

Summary

The Regulation applies to two categories of employment aid: aid for job creation and aid to promote the recruitment of disadvantaged and disabled workers. Other types of employment aid are not prohibited, but they must be notified to the Commission in advance.

In accordance with Article 87(1) of the EC Treaty, aid exempted by the Regulation must have as its object and effect the promotion of employment, while leaving trade unaffected. Export aid is not covered by the Regulation.

Aid granted to an individual enterprise and aid which does not lead to an overall increase in the number of employees (e.g. aid to help convert temporary contracts into permanent ones) remains subject to the prior notification requirement. Enterprises which qualify for rescue and restructuring aid remain subject to the relevant EU guidelines.

The Regulation applies to all industries apart from coalmining (Council Regulation 1407/2002), shipbuilding (Council Regulation 1540/98) and transport, which remain subject to sector-specific rules.

Job creation

With regard to employment aid intended for job creation, the Regulation lays down the following ceilings:

  • In areas and sectors which do not qualify for regional aid, the gross aid intensity must not exceed the ceilings of 15 % in the case of small enterprises and 7.5 % in the case of medium-sized enterprises.
  • In areas and sectors which qualify for regional aid, the ceilings correspond to those mentioned on the regional aid maps and in the multisectoral framework for regional aid for large investment projects. In the case of SMEs, the ceiling is increased by 10 or 15 percentage points according to whether the areas are covered by point (c) or point (a) of Article 87(3). In less-favoured areas, it is these ceilings or, where appropriate, the higher ceilings provided for in Regulation 1257/1999 that apply.

Aid may be granted for a maximum period of two years, provided that the employment created:

  • represents a net increase in the number of employees;
  • is maintained for a minimum period of three years, or two years in the case of SMEs;
  • benefits workers who have never had a job or are unemployed.

To receive this type of aid, the beneficiary must submit an application to the Member States.

Recruitment of disadvantaged or disabled workers

The Regulation contains definitions of “disadvantaged worker” and “disabled worker” that are broad enough to include, in the case of the former, any person who is a member of an ethnic minority, a migrant or unemployed and, in the case of the latter, any person who has a physical, mental or psychological impairment.

In the case of aid to promote the recruitment of disadvantaged or disabled workers, Member States may grant enterprises aid of up to 50 % (for disadvantaged workers) and 60 % (for disabled workers) of wage costs and compulsory social security contributions over a period of one year. Aid may also be granted to compensate for the reduced productivity of such workers and to adapt premises and provide special assistance.

Cumulation

The ceilings laid down in the Regulation apply irrespective of whether the resources are national resources or EU resources. On the other hand, only aid to disadvantaged and disabled workers may be combined with other State aid or with other EU support measures, provided that this does not result in a gross aid intensity exceeding 100 % of wage costs.

Transparency and monitoring

In order to ensure effective monitoring and a sufficient degree of transparency, the Commission requires Member States:

  • to notify it, within 20 working days using a standard form (Annex I), of the implementation of any aid scheme exempted by the Regulation;
  • to maintain detailed records of aid schemes exempted by the Regulation;
  • to compile an annual report on the application of the Regulation (Annex II).

At the end of the period of validity of the Regulation, aid schemes exempted under the Regulation will remain exempted during an adjustment period of six months.

Regulation (EC) No 2204/2002, initially scheduled to expire on 31 December 2006, was extended a first time until 31 December 2007 by Regulation (EC) No 1040/2006, then a second time until 30 June 2008 by Regulation (EC) No 1976/2006.

Background

Within the framework of Regulation 994/98, which allows the Commission to exempt certain categories of State aid, the Regulation is designed to exempt aid for job creation and aid to promote the recruitment of disadvantaged and disabled workers in order to simplify administrative procedures.

In the light of experience gained in applying employment aid provisions, the Regulation exempts employment aid where it is intended for areas that qualify for regional aid, or for small and medium-sized enterprises (SMEs) rather than large enterprises.

The Regulation takes account, however, of the guidelines on national regional aid and of Regulation 70/2001 on State aid to small and medium-sized enterprises.

References

Act Entry into force – Date of expiry Deadline for transposition in the Member States Official Journal
Regulation (EC) No 2204/2002 02.01.2003-30.06.2008 OJ L 337 of 13.12.2002
Amending act(s) Entry into force Deadline for transposition in the Member States Official Journal
Regulation (EC) No 1040/2006 28.07.2006 OJ L 187 of 08.07.2006
Regulation (EC) No 1976/2006 24.12.2006 OJ L 368 of 23.12.2006

Towards a stronger partnership for European Tourism

Towards a stronger partnership for European Tourism

Outline of the Community (European Union) legislation about Towards a stronger partnership for European Tourism

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Enterprise > Industry

Towards a stronger partnership for European Tourism

Document or Iniciative

Communication from the Commission of 17 March 2006 on “A renewed EU Tourism Policy – Towards a stronger partnership for European Tourism” [COM(2006) 134 final – Not published in the Official Journal].

Summary

As a factor in growth and job creation, the tourism industry plays a key role in the Lisbon Strategy.

The rapid growth of the tourist industry has been driven by globalisation, demographic changes and the evolution in transport. The job creation rate in tourism is above average compared to other sectors, and tourism creates in particular highly diverse jobs, often part-time, thus contributing to the employment of women, young and less-skilled persons. Sustainable tourism also plays a major role in the preservation and enhancement of the cultural and natural heritage, and contributes to local development in an increasing number of less-favoured regions. It also contributes to a better understanding among peoples.

A renewed European tourism policy

The European Union is proposing a new tourism policy to meet the challenges facing this sector and fully exploit its potential. Changing demography, global competition, concern for sustainability and the demand for specific forms of tourism are all challenges which Europe is faced with today.

In light of the above, coordination, dialogue and partnership amongst tourism stakeholders will be essential, as tourism is an activity involving a wide variety of stakeholders. The public authorities at European, national, regional and local levels will need to cooperate with the private sector, the sectoral social partners and stakeholders. The Commission will continue its efforts to keep the members of the Advisory Committee on Tourism informed, in an efficient and transparent way, of the tourism-related initiatives included in its Work Programme.

Mainstreaming measures

The objective of the first set of measures is better regulation. The Commission wants to ensure that the impact assessments for new proposals related to tourism take the competitiveness of the industry into account. It also plans to screen pending legislative proposals and simplify existing European legislation. The Member States are also called upon to carry out exercises of this kind in order to avoid a cumulative administrative burden which could damage the industry’s competitiveness.

In addition, many Community actions, not only in the area of enterprise policy but also in other European policy areas, have nevertheless also had a direct or indirect impact on the competitiveness of European tourism. For this reason, Europe also needs to use other policy instruments to promote competitiveness.

Greater use needs to be made of existing European financial instruments in order to promote tourism:

The Structural Funds, the ERDF and the ESF will support the development of tourism businesses and services, professional mobility, educational programmes and training.

The Cohesion Fund will support environment and transport infrastructures.

The future Leonardo Da Vinci programme includes a new mobility programme for apprentices, for which tourism has been identified as a possible pilot sector.

The EAFRD will provide support to improve the countryside and the quality of agricultural production, and to upgrade the cultural heritage with a view to developing rural tourism and diversifying the rural economy, particularly in the new Member States and the candidate countries.

The EFF proposes eco-tourism as a new area which could absorb the fishermen affected by the restructuring of the fisheries sector. Small-scale fisheries and tourism infrastructure will also be supported.

The proposed “Competitiveness and Innovation Framework Programme” will support the competitiveness of enterprises, especially SMEs, in the tourism sector.

The proposed 7th EC Framework Programme for Research may result in benefits for the tourism sector, thanks to research on information and communication technologies, satellite applications, cultural heritage and land use.

Promoting sustainable tourism

Based on the 2003 Communication on “Basic orientations for the sustainability of European tourism” and the work of the expert group known as the Tourism Sustainability Group, the Commission plans to present a proposal on a European Agenda 21 for tourism in 2007.

The specific actions which the Commission intends to take to support the sustainability of tourism include:

  • the exchange of good practice at national and international levels to support SMEs and in the area of ‘tourism for all’;
  • evaluation of the economic impact of better accessibility in the tourism sector;
  • publication of a handbook on ‘How to set up Learning Areas in the Tourism sector’;
  • the study of employment trends in coastal and sea-related tourism sectors;
  • assessment of the implications of e-business on the tourism industry;
  • tackling at all levels the sexual exploitation of children by tourists.

Improving understanding of tourism

Up-to-date, detailed, relevant and comparable statistics on tourism are essential in order to make effective decisions. The collection of statistics in the area of tourism must be improved at European and national levels (Eurostat and Tourism Satellite Accounts).

Improving the visibility of tourism

The Commission wishes to promote European tourist destinations via a portal providing practical information for tourists travelling in Europe (transportation, places to visit, activities and when they can be done, weather, etc.) but also drawing attention to the impact which cultural and sporting events organised by European cities and regions can have on SMEs.

The Annual European Tourism Forum, which began in 2002, is hosted by a different Member State every year in collaboration with the Commission. It highlights the complexity of tourism as a phenomenon which affects many parts of the economic and social fabric. The Commission encourages dialogue within this Forum. The fact that a number of Council Presidencies have organised ministerial meetings and conferences has also helped raise the profile of European tourism.

Background

This Communication was published one year after the Communication “Working together for growth and jobs – A new start for the Lisbon Strategy”. The tourism industry is important for the Lisbon Strategy in terms of sustainable growth and job creation, but it must nevertheless address particular challenges.

The development of this collaboration can be reviewed regularly during the European Tourism Forums.

 

Youth on the Move

Youth on the Move

Outline of the Community (European Union) legislation about Youth on the Move

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These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Education training youth sport > Youth

Youth on the Move

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 15 September 2010 – Youth on the Move – An initiative to unleash the potential of young people to achieve smart, sustainable and inclusive growth in the European Union [COM(2010) 477 final – Not published in the Official Journal].

Summary

High quality education and training, effective labour market integration and increased mobility are essential to unleash the potential of all young people and to achieve the objectives of the Europe 2020 strategy for European Union (EU) growth. However, young people continue to face challenges in these domains. Consequently, through its flagship initiative “Youth on the Move”, the EU aims at responding to these challenges and helping young people succeed in the knowledge economy.

The Youth on the Move initiative presents key new actions, reinforces existing ones and ensures their implementation at the national and EU level by exploiting financial support from relevant EU programmes and the Structural Funds. It focuses on four main strands:

Lifelong learning

The Europe 2020 strategy set the target of reducing the rate of early school leaving to 10 %. To this end, action that focuses on prevention and targets pupils at risk of dropping-out should be taken as early as possible. In June 2011, the Council adopted a recommendation on reducing early school leaving, to respond to its different causes. The Commission also set up a High Level Expert Group on Literacy, tasked with recommending new avenues for improving reading literacy in the EU.

In its communication on a new impetus for cooperation in vocational education and training (VET), the Commission reiterates the importance of modernising this sector with a view to improving its quality and provision. Recognising the contribution that VET can make to youth employability and to reducing early school leaving, cooperation in this area was given new impetus at the end of 2010 through the adoption of the Bruges Communiqué . The latter defines strategic objectives for the period 2011-2020 and an action plan with concrete measures at national level and aid at European level.

Apprenticeship-type vocational training and high quality traineeships are essential for enabling young people to adjust to the demands of, and thus better integrate into, the labour market. Hence, the Commission will propose a quality framework for traineeships and will support EU countries in improving access to and participation in traineeships.

The recognition and validation of non-formal and informal learning (learning outside the formal education system) can facilitate access to further learning, particularly for young people with fewer opportunities. To this end, the Commission will propose in 2011 a draft Council recommendation to improve the ways in which EU countries recognise skills acquired through such learning activities.

Higher education

The contribution of higher education is essential to achieving the objectives of the knowledge economy. However, the sector needs to be modernised to allow it to contribute even more effectively and to help reach the Europe 2020 target of increasing the proportion of young people graduating from higher education or equivalent to 40 %. To this end, the Commission presented a communication in September 2011 on a new and reinforced agenda for higher education.

Cooperation and competition between higher education institutions are very much influenced by their performance. Knowing the performance level of an institution can help students in their choice of study as well as facilitate partnerships across borders. Thus, in June 2011 the Commission presented the results of a feasibility study for establishing a global multi-dimensional tool to rank higher education performance and educational outcomes. On the basis of these results, the Commission will continue to develop this tool from the end of 2011.

Europe’s innovation capacity is vital for ensuring its economic competitiveness. This requires the further development of knowledge partnerships and the creation of stronger links between education, research and innovation. With this in mind, in June 2011 the Commission proposed the establishment of a multiannual strategic innovation agenda that sets out priorities for the next seven years for higher education, research, innovation and entrepreneurship.

Mobility

Through learning mobility, young people can acquire new professional competences and thus improve their future employability. At the same time, learning mobility has enabled education and training systems and institutions to become more accessible, international and efficient. In order to extend opportunities for learning mobility to all young people, the Commission:

  • created a “Youth on the Move” website for information on opportunities for leaning and mobility in the EU;
  • proposed a Council recommendation to EU countries that addresses the obstacles to learning mobility;
  • will develop a Youth on the Move card to facilitate mobile learners’ integration process abroad;
  • will develop in 2012 a European skills passport based on Europass, which will facilitate the recognition throughout the EU of competences acquired by European young people outside the formal education system.

There also continue to be obstacles for employment mobility, through which young people could acquire new skills and competences. For this reason the Commission will implement:

  • a pilot project called “Your first EURES job” to test new ways to help young people find a job anywhere in the EU;
  • a “European Vacancy Monitor” through which vacant jobs, together with the skills needed, can be identified in Europe.

Youth employment

To contribute to the Europe 2020 objective of increasing the general employment rate of 20-64 year-olds to 75 %, it is essential to reduce the high level of youth unemployment. As part of this, young people should be better supported in the transition from education to employment through active labour market or social measures. At the same time, incentive measures should be put in place for employers to employ new entrants. Young people at risk should be targeted in particular, so as to facilitate their return to education and training or to the labour market. In order to support policy development in this field, the Commission has undertaken to carry out systematic monitoring of the situation of young people not in employment, education or training. It has also established dialogue between the European Public Employment Services which met in March 2011 to examine the approaches and measures taken by these services in order to help low-skilled young people.

Self-employment and entrepreneurship should also be considered as valuable options for reducing youth unemployment and tackling social exclusion. Thus, it is essential that educational institutions, with the support of the public and private sectors, promote entrepreneurial mindsets and attitudes. Young people should be given more opportunities and support for creating an enterprise or for starting their own business. In this respect, the Commission encourages greater use of the new European Progress Micro-finance Facility to support potential young entrepreneurs.

Related Acts

of 19 November 2010 on the ‘Youth on the Move’ initiative – an integrated approach in response to the challenges young people face [Official Journal C 326 of 3.12.2010].

The Council requests that the Youth on the Move initiative is implemented within the context of the Europe 2020 Strategy and in line with the 2020 Education and Training Programme. It also insists on the need to rationalise and optimise the objectives and investments in times of budget constraints.

Europe 2020: a strategy for European Union growth

Europe 2020: a strategy for European Union growth

Outline of the Community (European Union) legislation about Europe 2020: a strategy for European Union growth

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > European Strategy for Growth

Europe 2020: a strategy for European Union growth

Document or Iniciative

Communication from the Commission of 3 March 2010 – Europe 2020 A strategy for smart, sustainable and inclusive growth [COM(2010) 2020 final – Not published in the Official Journal].

Summary

The Commission presents the strategy which should enable the European Union (EU) to achieve growth that is:

  • smart, through the development of knowledge and innovation;
  • sustainable, based on a greener, more resource efficient and more competitive economy;
  • inclusive, aimed at strengthening employment, and social and territorial cohesion.

In addition, the Commission proposes a series of targets to be achieved by 2020:

  • increasing the employment rate of the population aged 20-64 to 75 %;
  • investing 3 % of gross domestic product (GDP) in research and development;
  • reducing carbon emissions by 20 % (and by 30 % if conditions permit), increasing the share of renewable energies by 20 % and increasing energy efficiency by 20 %;
  • reducing the school drop out rate to less than 10 % and increasing the proportion of tertiary degrees to 40 %;
  • reducing the number of people threatened by poverty by 20 million.

The EU 2020 programme

The Commission presents seven flagship initiatives to be put in place at European level and in EU countries:

  • the Innovation Union, to support the production of innovative products and services, in particular concerning climate change, energy efficiency, health and the ageing population;
  • the Youth on the move initiative, to enhance the performance of education systems, non-formal and informal learning, student and researcher mobility, but also young people’s entry to the labour market;
  • the Digital Agenda for Europe initiative, to promote the creation of a digital single market, characterised by a high level of trust and a clear legal framework. Furthermore, fast and subsequently ultra fast internet should be accessible to the population as a whole;
  • the Resource-efficient Europe initiative, to support the sustainable management of resources and the reduction of carbon emissions, while maintaining the competitiveness of the European economy and its energy security;
  • the industrial policy for the globalisation era initiative, to help businesses to overcome the economic crisis, integrate into world trade and adopt more environmentally-friendly production methods;
  • the agenda for new skills and jobs, to improve employment and the sustainability of social models. The aim is to encourage the strategies of flexicurity, worker and student training, but also gender equality and the employment of older workers;
  • the European Platform against Poverty, to increase cooperation between EU countries, and to follow the Open Method of Coordination in the areas of social exclusion and social protection. The objective of the Platform is to be the economic, social and territorial cohesion of the EU, and the social inclusion of people experiencing poverty.

Introduction of the strategy

The strategy is to be presented through 10 ‘Europe 2020’ integrated guidelines adopted by the June 2010 European Council. They are to replace the current 24 employment guidelines and the broad economic policy guidelines.

The Council may also address policy recommendations to EU countries on economic and budget matters, and all of the thematic areas covered by the strategy.

A substantial part of the strategy is to be implemented by the national, regional and local authorities of the EU countries, associating national parliaments, social partners and civil society. Actions to raise awareness are to be conducted among European citizens.

The Commission shall be responsible for monitoring progress. It shall present yearly reports, including reports on the achievements of the stability and convergence programmes.

Related Acts

Communication of 30 May 2012 from the Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank: Action for stability, growth and jobs [COM (2012) 299 final].
Following the economic crisis, this Communication explores both the role of the EU and the role of EU countries in a new growth initiative, intended to put the EU economy back on a sound footing. The Commission suggests that the EU needs to tap into: external sources of growth; the potential of EU funding of the growth that Europe needs; and the growth potential of the Economic and Monetary Union, of the Internal Market, and of human capital.

Council Decision 2010/707/EU of 21 October 2010 on guidelines for the employment policies of the Member States [Official Journal L 308 of 24.11.2010].

 of 13 July 2010 on broad guidelines for the economic policies of the Member States and of the Union [Official Journal L 191 of 23.7.2010].

 of 25 and 26 March 2010.
The European Council has approved the main aspects of the ‘Europe 2020’ strategy for jobs and growth.

New neighbourhood policy strategy

New neighbourhood policy strategy

Outline of the Community (European Union) legislation about New neighbourhood policy strategy

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

External relations > Eastern europe and central asia

New neighbourhood policy strategy

Document or Iniciative

Joint Communication to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 25 May 2011 – A new response to a changing Neighbourhood [COM(2011) 303 final – Not published in the Official Journal].

Summary

By presenting a new strategy for the European Neighbourhood Policy (ENP), the Commission intends to improve its support for the processes of reform undertaken by its partner countries.

This new approach is based on greater differentiation by country of the cooperation objectives. Therefore, the action plans for each country that set the priorities for the short and medium term must be more targeted and more flexible in order to be able to be adapted to new financial priorities if necessary.

The strategy also aims to:

  • increase the conditionality of financial assistance, which can be increased or restricted depending on the progress made concerning democracy and human rights;
  • support inclusive economic development, which promotes trade, investment, sustainable development, and reducing unemployment;
  • strengthen regional synergies between the partners, within the Eastern Partnership and the Union for the Mediterranean, particularly in the areas of trade, energy, transport, migration and mobility.

Supporting democracy

The strategy creates new instruments for promoting democracy and human rights:

  • a European Endowment for Democracy aimed at democratic political parties representing a broad spectrum of views, non-governmental organisations and social partners;
  • a Civil Society Facility, which is essential in any democratic society.

Establishing deep and sustainable democracies also requires stronger partnership on matters of political cooperation and security. The partners must conduct a more continuous political dialogue at a bilateral level and within regional bodies. Their joint action must be strengthened at international level.

Promoting sustainable and inclusive growth

The partner countries are encouraged to adopt policies which promote economic growth, the business environment and investment, and reduce the differences in development between regions.

Economic growth should lead to higher levels of employment and social inclusion. The ENP therefore provides for political dialogue for macroeconomic reforms, employment and social affairs. The Commission also suggests that agricultural and rural development projects are launched to combat poverty.

Lastly, the creation of Free Trade Areas should be encouraged to strengthen trade ties between the partners, and regional integration. The European Union (EU) is the main import and export market for the ENP partners. In this context, those countries not wishing to embark on free trade negotiations can benefit from trade concessions and mutual acceptance agreements on the conformity of industrial products.

Enhancing cooperation

Certain areas of sector cooperation must be enhanced, in particular for:

  • knowledge, research and innovation, including through student and academic staff mobility;
  • partner participation in EU programmes and the work of EU agencies.

Similar enhanced cooperation is also planned to improve energy security, environmental protection, transport, communication technologies, and tackling climate change.

Partners whose reforms are the most advanced can begin a process of visa facilitation.

Financing

This new strategy is presented in the last programming phase of the European Neighbourhood and Partnership Instrument (ENPI). Its resources need to be increased and oriented towards new priorities.

The financial resources of the ENP can be diversified by having recourse to other European thematic instruments and crisis intervention mechanisms.

In addition, the options for financing through loans from the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) must be increased. These banks must be able to act jointly, including for the financing of development operations of large infrastructure and connectivity projects.

New skills for new jobs

New skills for new jobs

Outline of the Community (European Union) legislation about New skills for new jobs

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > Job creation measures

New skills for new jobs

Document or Iniciative

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 16 December 2008 – ‘New skills for New Jobs: Anticipating and matching labour market and skills needs’ [
COM(2008) 868

final – Not published in the Official Journal].

Summary

As part of the renewed Lisbon Strategy for growth and jobs, the Commission proposes an initiative aimed at improving workers’ qualifications in accordance with the needs of European employers. It is based on a prospective analysis of labour market trends up to 2020.

There is great potential for the creation of jobs in Europe in the medium and long term, particularly replacement jobs due to the ageing population. In addition, the market for ecological services and products should bring new types of job.


Skills and qualification requirements will increase for all types and levels of occupation. Employers are looking in particular for transversal competencies such as communication skills or analytical and problem-solving skills.

The level of qualifications of the European workforce should meet the new needs of the labour market. This objective can be achieved by introducing active policies and by improving the effectiveness of education and training systems. The modernisation of labour markets also implies the implementation of the integrated strategies in the area of flexicurity.

The Commission encourages Member States to improve the assessment and anticipation of trends in the labour market and skills requirements.It proposes four strands of action:

  • the dissemination of information on the trends and new opportunities in the labour market, primarily by the setting up of a “European Labour Market Monitor” but also via the Commission’s employment, training and mobility services (EURES, PLOTEUS and EURAXESS);
  • the development of forecasting tools in order to produce accurate and regular data for each sector of activity. New joint methodologies should be developed via the PROGRESS programme and the Lifelong Learning Programme. Employers will be involved in anticipating needs and developing partnerships with a view to meeting those needs;
  • deepening international cooperation, developing policy dialogue and the exchange of experience;
  • mobilising the Community’s political and financial instruments.

Context

This initiative is part of the European Economic Recovery Plan adopted in December 2008. It should help to reduce the consequences of the financial crisis on the labour markets.


The Commission will present a first report on the results of this initiative in 2010.

Related Acts

Presidency Conclusions (pdf ) of the Brussels Spring European Council on 13 and 14 March 2008 [Not published in the Official Journal].

Council Resolution (pdf ) of 15 November 2007 on the new skills for new jobs [OJ C 290 of 4.12.2007].

Financing SME Growth

Financing SME Growth

Outline of the Community (European Union) legislation about Financing SME Growth

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Employment and social policy > European Strategy for Growth > Growth and jobs

Financing SME Growth

Document or Iniciative

Communication from the Commission to the Council, the European Parliament, the European Economic and Social committee and the Committee of the Regions of 29 June 2006 – Implementing the Community Lisbon Programme: Financing SME Growth – Adding European Value [COM(2006) 349 final – Not published in the Official Journal].

Summary

The challenge of financing for small and medium-sized enterprises (SMEs)

Improving access to finance for SMEs, and more specifically initial investment and the ongoing injection of equity, is essential if an SME is to tap into its growth and innovation potential. However, a large number of SMEs in the EU face an equity gap. 2. When their initial funds have been exhausted, entrepreneurs have to obtain external finance to develop their project. Financing SMEs is, however, often considered too risky on account of the low rates of return, particularly during the seed phase. There is thus a serious lack of business angels and venture capital funds that are willing to invest in young innovative SMEs.

The inability to obtain early-stage investment prevents many SMEs reaching a size where they can attract expansion capital, thus stunting their growth.

SMEs, as sources of innovation and job creation, are the engines of European growth, and giving them the opportunity to start up, develop and achieve their potential makes a vital contribution to the Lisbon process.

Boosting SME financing

The European Commission suggests different measures to boost financing for SMEs.

Raising more venture capital investment

Encouraging venture capital investment involves the establishment of an internal market for venture capital. The aim is to overcome the fragmentation of the venture capital market and allow the various operators to invest across borders without incurring unfavourable tax treatment.

More attention should also be paid to the exit strategy (the point at which the venture capitalist can recover his capital by giving up his share). As initial public offerings of stock provide a natural exit route for venture capital investors, it is essential to make European growth stock markets more liquid and efficient.

The EU should also develop a growth and investment culture. Successful entrepreneurs should therefore be encouraged to invest in turn and become business angels.

Developing debt finance for SMEs

The EU should encourage traditional bank finance for innovation. A round table between banks and SMEs will be organised in order to improve the scope for long-term banking relationships, promote microfinance (loans of less than 25 000) and “mezzanine finance” (hybrids of loans and equity), and also evaluate the advantages of tax relief systems for young innovative companies.

Strengthening the EU contribution to SME financing

The EU needs to devote more resources to SME financing.

The main existing Community instruments in this respect are the Competitiveness and Innovation Framework Programme (CIP) (2007-2013), the JEREMIE (Joint European Resources for Micro to Medium Enterprises) initiative, under the EU’s regional policy and the Seventh Research Framework Programme (2007-2013).

The EU has also reviewed its regulations on State aid for risk capital funds, particularly to help innovative SMEs.

Introducing better governance at national level

It is also up to the Member States to ensure that the regulatory and fiscal environment favours SME access to debt finance and venture capital. Some Member States have already been successful in doing so. It is therefore essential to identify and spread good practices.

It is also recommended that the Member States draw up support schemes for entrepreneurs to make them aware of investor concerns and prepare them on how to present their projects better.

Background

This Communication forms part of the Lisbon strategy and its proposals complement the Communication on a modern policy for SMEs.

The European Commission will present a report on the progress made in SME financing in 2009 that will feed into the reporting on progress with the renewed Lisbon strategy.

Related Acts

Communication from the Commission to the Council, the European Parliament, the European Economic and Social committee and the Committee of the Regions of 10 November 2005, entitled “Implementing the community Lisbon programme – Modern SME policy for growth and employment” [COM (2005) 551 final – Not published in the Official Journal].

Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises [Official Journal L 124 of 20.05.2003].