«EU INDUSTRIAL POLICY: ASSESSMENT OF RECENT DEVELOPMENTS AND RECOMMENDATIONS FOR FUTURE POLICIES STUDY Abstract Following disregard in the 1980s, ...»
Major delays in the transposition of directives are recorded by Belgium, Bulgaria, Ireland, Hungary, Luxembourg, the Netherlands, Poland, Slovenia and Finland. In terms of compliance, under-performances are recorded in Italy, Poland, France, Spain, Czech Republic, Bulgaria and Belgium.
Source: Authors’ processing59 The latest traffic light chart shows that there are Member States that are still underperforming in key Single Market policy areas, such as public procurement (see chart below). Only a few countries, including Denmark, Germany, Luxembourg, Finland and Sweden, record a performance above the average of the countries observed.
http://ec.europa.eu/internal_market/scoreboard/performance_by_governance_tool/transposition/index_en.ht m Note: Indicator : Measures the level of fulfilment with the 1% target established by the European Council: transposition deficits above 1% were rated as "red", those below or equal to 1% were "green"; no "yellow" designation. Indicator : An increasing number of outstanding directives were given a "red" rating, with an unchanged number rated as "yellow" and a decreasing number as "green". Indicator : Measures the level of fulfilment with the 0% target established by the European Council for directives overdue by two years or longer: one or more long overdue directives were rated "red"; those with no long overdue directives were rated "green"; no "yellow" rating was designated. Indicators  and : An average (+/- 10 %) score was rated as "yellow"; a score below it as "red" and a score above it as "green".
Enhancing the business environment There are many business environment initiatives adopted by the European Commission to enable access to finance, support to new market openings and the boosting of entrepreneurship, skills upgrading and innovation. The Small Business Act for Europe (SBA) – launched in June 2008 and monitored by DG Enterprise and Industry - is one example. At the heart of the European SBA is the idea that achieving the best possible framework conditions for SMEs depends mostly on the recognition of entrepreneurs by society. Therefore, the aim of the SBA is to improve the overall policy approach to entrepreneurship, to irreversibly anchor the “Think Small First” principle in policymaking from regulation to public service, and to promote SMEs’ growth by helping them tackle the remaining problems that hamper their development. The “Think Small First” principle specifically calls for legislation to take into account the needs of small businesses and dedicates particular attention to micro-enterprises and the specific challenges they face especially during the start-up phase. It lays down real, binding, legal rules, such as three days and EUR 100 to set up a business, 30 days to obtain a trading permit, and shorter deadlines for recovering debts.
Box 10. The ten principles of SBA
1. Create an environment in which entrepreneurs and family businesses can thrive and entrepreneurship is rewarded
2. Ensure that honest entrepreneurs who have faced bankruptcy quickly get a second chance
3. Design rules according to the “Think Small First” principle
4. Make public administrations responsive to SMEs’ needs
5. Adapt public policy tools to SMEs’ needs: facilitate SMEs’ participation in public procurement and better use State Aid possibilities for SMEs
6. Facilitate SMEs’ access to finance and develop a legal and business environment supportive of timely payments in commercial transactions
7. Help SMEs to benefit more from the opportunities offered by the Single Market
8. Promote the upgrading of skills in SMEs and all forms of innovation
9. Enable SMEs to turn environmental challenges into opportunities
10. Encourage and support SMEs to benefit from the growth of markets Source: Authors.
The recent SME Performance Review 2013/2014 61 recognises that specific measures for improving the SME business environment play an important enabling role in ensuring that SMEs are able to reap the full benefits of a return to solid and sustainable macroeconomic growth. However, there are still key issues and challenges currently faced by SMEs, which hamper their growth and competitiveness. Amongst the 10 principles of the Small Business Act, SMEs find significant challenges in meeting requirements in terms of Accessing Finance, Entrepreneurship, Responsive Administration, Skills and Innovation. Under Access to Finance, credits or loans and the excessive bureaucratic procedures to access EU funds have been identified as the main barriers. As far as Entrepreneurship is concerned, the lack of financial support measures was the main underlying barrier, which also correlates to the Access to Finance. For Responsive Administration, the main challenge is the administrative burden, and more specifically the difficulty in managing all of the administrative requirements and requests from various authorities. Finally, issues related to the Skills and Innovation principle focused on the lack of strategic support in converting an innovative idea into a commercial product/process/service.
Overall, the number of SBA-related policy measures adopted/implemented during 2013in EU28 was slightly higher than the previous reference period (422 measures), but still lower than the 2011-2012 reference period, during which 735 measures were adopted/implemented. The highest policy progress was recorded for measures related to Access to Finance (116), followed by Entrepreneurship (83), and Skills & Innovation (57), while Single Market and Second Chance were the two laggard principles, with only 8 and 15 measures, respectively.
If reporting the total number of measures adopted/implemented for each SBA principle (by dividing with the number of existing sub-measures), it is worth noting that Access to Finance (13) still remained at the top, followed by Internationalisation (10), Entrepreneurship (8.3), Skills and Innovation (8), and Responsive Administration (6).
On the basis of the challenges and issues recognised above, it should be pointed out that during the 2013-2014 reference period Access to Finance, Entrepreneurship, Skills & Innovation, Responsive Administration and Internationalisation had the highest implementation rate.
European Commission (2014), A Partial and Fragile Recovery: Annual report on European SMEs 2013/2014.
SMEs performance review 2013/2014. http://ec.europa.eu/enterprise/policies/sme/facts-figuresanalysis/performance-review/files/supporting-documents/2014/annual-report-smes-2014_en.pdf
2011/2012 2012/2013 2013/2014 Source: Authors processing of European Commission data (2014) Source: Authors As part of the simplification process, in October 2013 the European Commission launched the ‘Regulatory Fitness and Performance Programme’ (REFIT)62, whose aim was to simplify and reduce regulatory burdens in existing legislation, with a particularly focus on supporting SMEs. Overall 100 actions were identified and are currently being implemented.
Examples include the introduction of a standard EU VAT Declaration,63 the improvement of the European small claims procedure64, the amended Directive on recognition of professional qualifications (facilitating access to information), a new legal framework for public procurement65 (including shorter deadlines for procedures, the possibility of modifying contracts, better access for SMEs, etc.), and the intellectual property rights Regulation (EU Regulation 608/2013). Several legislative changes have been introduced to facilitate the access of enterprises, particularly SMEs, to finance. The Late Payments Directive66 is one example. Additionally, there are the Capital Requirements Regulations including a correcting factor lowering the capital requirements related to credit risk on exposures to SMEs; the revised Market in Financial Instruments Directive (MiFID) aimed at creating dedicated trading platforms labelled "SME growth markets"; the revised Transparency Directive abolishing the requirement to publish quarterly financial European Commission (2014), Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee of the Regions. Regulatory Fitness and Performance Programme (REFIT): State of Play and Outlook (SWD, 2014, 192 final).
European Commission (2013), Proposal for a Council Directive amending Directive 2006/112/EC on the Common System of Value Added Tax as regards a Standard VAT Return, Brussels, 23 October 2013, COM(2013) 721 final.
European Commission (2013), Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EC) No. 861/2007 of the European Parliament and the Council of 11 July 2007 establishing a European Small Claims Procedure and Regulation (EC) No. 1896/2006 of the European Parliament and of the Council of 12 December 2006 creating a European order for payment procedure, Brussels, 19 November 2013, COM(2013) 794 final.
The existing public procurement legislation (Directive 2004/17/EC) has recently been revised. The new directives (Directive 2014/24/EU, Directive 2014/25/EU) were voted by the European Parliament on 15 January 2014 and adopted by the Council on 11 February 2014. The Member States have until April 2016 to transpose the new rules into their national law (except with regard to e-procurement, where the deadline is September 2018).
European Directive 2011/7/EU on combating late payment in commercial transactions of 16 February 2011.
The directive requires debtors to pay interest and the reasonable recovery costs of the creditor if they do not pay for goods or services on time. The limits are 60 days for businesses and 30 days for public authorities.
information; and the new rules on European Venture Capital Funds and European Social Entrepreneurship Funds creating a special EU passport for fund managers investing in startup SMEs and social businesses.
Box 12. Member State reforms in the area of business environment
Intellectual property rights Also, optimising the regulatory environment for research and innovation can enhance the international competitiveness of EU industry. There are a number of EU regulatory instruments aimed at fostering the competitive advantage of EU enterprises and increasing profitability in global markets. The most emphasised and successful one is Intellectual Property Rights (IPRs) protection. These rights include patents, trademarks, design rights and copyrights. As of 1 January 2014 the relevant legal framework applicable for the customs enforcement of intellectual property rights is covered by EU Regulations 608/2013 (basic regulation establishing the legislative framework for the enforcement of IPR) and 1352/2013 (implementing regulation, establishing the forms to be used to request the enforcement of IPR by the customs authorities). DG Enterprise and Industry has launched European Commission (2013), Commission Staff Working Document, Industrial Performance Scoreboard and Member States’ Competitiveness Performance and Implementation of EU Industrial Policy: A European 2020 initiative, Brussels.
based on European Commission (2013), Commission Staff Working Document, Industrial Performance
Scoreboard and Member States’ Competitiveness Performance and Implementation of EU Industrial Policy:
A European 2020 initiative, Brussels.
different initiatives in the field of intellectual property rights (e.g. support to national intellectual property offices, improving their business support services for IPR, etc.)69.
Trade policy The EU Trade policy conducted by DG Trade of the European Commission is designed to prevent the building of barriers to European exporters. Trade defence instruments, such as anti-dumping or anti-subsidy duties70, are ways of protecting European production against international trade distortions. With the aim of creating a favourable external competition environment for the manufacturing industry, the EU is pushing for the formation of industrial standards and the extension of Single Market rules to neighbouring and other countries71. Supporting SMEs’ economic activities outside the EU is also embedded in the Union’s overall competitiveness strategy as outlined in the Europe 2020 Communication on Industrial Policy and the EU 2010 Trade, Growth and World Affairs strategy72. The European Union is currently negotiating the Transatlantic Trade and Investment Partnership (TTIP) with the United States with the aim of tackling the barriers behind the customs borders, such as differences in technical regulations, standards and approval procedures.
Pressure for a 'greener' industrial policy arises from the 20/20/20 energy goals and from the roadmap for 2050, which sets European goals to reduce greenhouse gases by 80%-95% by 2050. There is some debate about whether environmental standards are an obstacle for a competitive manufacturing sector, or a potential driver of growth. Reducing greenhouse gas emissions, increasing energy efficiency and changing the energy mix from carbon based to "clean" energy (solar/wind) have become top priorities in the EU and these endeavours take on many different forms, including for instance: the Kyoto protocol, emission trading regimes, research programmes, the subsidisation of firms and households, energy taxes, taxes on the carbon content, and joint research programmes.