Small firms have been hard hit by the economic crisis, and so must be given incentives and support, including easier access to credit, help with innovation, tax breaks and less red tape, MEPs on Parliament's Special Committee on the Financial, Economic and Social Crisis (CRIS), and experts agreed at a workshop on Monday 1 February.

“SMEs represent the backbone of the European economy, provide most jobs and are the most creative. Theytherefore contribute considerably to the EU's success”, declared Special Committee Chairman Wolf Klinz (ALDE, DE),opening the workshop on theimpact of the crisis on SMEs.

"SMEs are important not only for innovation but alsoas engines for growth and employment", agreed Pontus Braunerhjelm, Managing Director of Swedish Entrepreneurship Forum and Professor of International Business and Entrepreneurship at the Royal Institute of Technology in Stockholm.

Need for bold measures

Diogo Feio (EPP, PT), and Burkhard Balz (EPP, DE), quizzedspeakers about the role of state and public authorities in supportingsmall firms and ensuring that the EUSmall Business Act is applied. Reinhilde Veugelers replied that "unfortunately, we have still incomplete knowledge about what works and what doesn't." But allspeakers agreed that "all assistance is welcome", because "everything we can do to promote creativity will promote our growth and development."

Now is a "good time for all co-operative initiatives" among SMEs to "pool the resources for R&D and training", said Ms Nowak in a reply to Sergio Gaetano Cofferati (S&D, IT). "Partnership between companies is the only way out", agreed Mr António Saraiva, President of the Confederation of Portuguese Industry (CIP),

Stressing the "absolute" importance of continuous training,Mr Huemer advocated "joint programmes for whole sectors", rather than separate training for each company.

In Europe, greater freedom to "hire and fire", which MrBraunerhjelm listed as a worthwhilelabour market measure, is "almost the F-word (...) it is an American model," said Olle Schmidt (ALDE, SE). "We don't need to copy the US system", but we do needa "system that enables restructuring", replied MrBraunerhjelm.

Kay Swinburne (ECR, UK) andSpecial committee rapporteur Pervenche Berès (S&D, FR), were both interested infinancial support to SMEs and asked respectively about "instruments to be set up to help these companies as regards credit" and their "access topublic procurement."

SMEs "maybe suffered lessfrom relocation of industries" but they are the bedrock of our economy and so it is essential to "guarantee their access to public procurement" and "develop on a large scale" other sources of financing e.g. equity, venture capital or micro-credits, said Ms Nowak. Ms Veugelers also stressed the need to "develop venture capital" atEU level.

Some SMEs see freedom to supply services across borders "as a kind of threat", said Mr Huemer, in a reply to a question by Othmar Karas (EPP, AT), about the impact of the EUservices directive. Mr Huemer noted that the directive had to be implemented by the end of 2009,and suggested waiting 3 years beforeevaluating the situation.

Next Steps

The experts' input will feed further discussion among MEPs and the final report bySpecial Committee rapporteurPervenche Berès. The draft should be unveiled on 29April, to allowtimefor amendmentsbefore the final report is adopted in Committee on 13July. The CRIS report thanwill be put to a voteby Parliament as a whole at the September II Plenary session.