UNION EUROPEENNE DE L’ARTISANAT ET DES PETITES ET MOYENNES ENTREPRISES
EUROPÄISCHE UNION DES HANDWERKS UND DER KLEIN- UND MITTELBETRIEBE
EUROPEAN ASSOCIATION OF CRAFT, SMALL AND MEDIUM-SIZED ENTERPRISES
UNIONE EUROPEA DELL’ARTIGIANATO E DELLE PICCOLE E MEDIE IMPRESE
Lisbon Strategy from an SME point of view
1. Lisbon Strategy - useful for Europe's SMEs?

The Lisbon Strategy 2000 was adopted by the European Council at a time when
Europe was experiencing an economic boom and urgent reforms were not the priority
of the Heads of States. The main aim was to add some popular policies (education,
research, knowledge society etc. and later in Stockholm also sustainability) and some
attractive goals (Lisbon goals) to the already existing reform agenda (Cardiff and
Luxembourg Process). Therefore, UEAPME’s judgement of the Strategy was quite
mixed from the beginning:
+ The Lisbon Agenda is a comprehensive Strategy, which could help the European
economy to achieve more dynamic growth, which would also be positive for
SMEs.
+ Later, in Feira the European Council adopted the "European Charter for Small
Enterprises", which added some specific SME points to the policy agenda.

-
The Lisbon Agenda was not helpful in solving the already existing delivery gap
on the reform agenda, on the contrary it was used as an excuse for further delays.
-
The invention of the so-called "Open Method of Co-ordination", was seen as an
insufficient alternative to an increase of European competencies, which failed at
the Intergovernmental Conference in Amsterdam (and also later in Nice).
The additional points on the Lisbon agenda were directed to the needs of big and
multinational enterprises and their employees. We will not deny that a positive
development of big industry is also helpful for the SME sector, but small enterprises
need specific measures in order to use their potential for growth:
+ more focus on a reduction of administrative burdens in three areas:
- national administration (start-ups, health and safety, labour market)
- cross-border business (compliance cost of taxation, posting of workers),
- additional administrative burdens coming from new EU regulations
(environment, consumer protection, non-discrimination)
+ access to finance in order to allow SMEs to invest:
- meet the challenge of Basel II (Rating Systems, guaranty-schemes)
- taxation reforms to strengthen their own capacity to finance
- reduction of the risk of failures (bankruptcy law)
- new instruments for risk-capital from outside (venture capital, seed financing).
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+ European reforms on the different taxation systems in order to:
- provide a level playing field (SMEs pay 23% more taxes than big companies)
- support the fight against the shadow economy in the service sector (non-wage
labour costs, reduced VAT rates)
- reduce the compliance costs for cross border business (Home State Taxation,
VAT obligations)
+ focus not only on start-ups and fast growing SMEs, which represent only a very
small number of them, but also on the majority of traditional SMEs:
- improving the conditions for innovation in the non-research based sector
- access to continuous training and recognition of informally gained competencies
2. Delivery deficits in the Lisbon Strategy
4 years after the start of the Lisbon Strategy there is a wide spread opinion that Europe
faces a serious delivery gap regarding the goals of this strategy, even if progress has
been made in some areas. From UEAPME's point of view the strategy failed to deliver at
three levels:

At European level the responsible decision-makers (Councils, European Parliament
and the Commission) were not able to deliver concrete measures (directives, etc.) on
policies were the Heads of State promised decisions (Community patent; .Public
Services)

If there was a decision at European level, the national governments were very often
not able or willing to transpose them into national law or regulation (only 58% of the
directives related to the Lisbon agenda are already implemented). Also the
commitments regarding the Stability and Growth Pact were not strong enough.

In many countries the Social Partners, mostly the Trade Unions, do not show enough
commitment to the agreed reforms, even if there is a common understanding between
the European Social Partners about the necessity of these reforms. Too often national
reforms are blocked by strikes from Trade Unions, which primarily want to protect old
structures (public sector) instead of allowing the creation of new employment.
The "open method of co-ordination", was created as a new instrument to support
national reforms where there is still no formal competence at European level (best
practices, benchmarking, commonly agreed targets, peer pressure). After 4 years it has to
be judged as a very bureaucratic and inefficient procedure, which has very limited
influence on decision-making at national level.
3. Lisbon Strategy - is there a Future?
Even if nobody seriously believes anymore that the original Lisbon targets can be
achieved in time, there is no alternative but to go on with the agreed agenda, but adjusted
according to the deficits towards SMEs as mentioned above. The Lisbon agenda is
necessary to bring Europe back to a growth path, but the last 4 years has also
demonstrated the shortcomings of this strategy.
UEAPME still supports the overall strategy and asks the Irish Presidency to strengthen
and - where necessary - to redirect the Lisbon goals. There are some positive facts, which
are able to reanimate the whole process:
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
After 4 years all actors see the shortcomings and know that they have to commit
themselves more strongly to the common goals.

The recently presented "Wim Kok Report" (Jobs, Jobs, Jobs) will give at least a new
momentum to labour market reforms and will make it more difficult for Trade Unions
to block necessary reforms.

New initiatives form the European Commission like the Communication on "Making
Work Pay", will hopefully facilitate the urgently needed reforms in the social
protection system.

The up-coming Enlargement of the European Union will provide a new push for
reforms and UEAPME is very confident that the new Member States will contribute
positively to the reform agenda by using their own experiences with economic reforms
made during the last 12 years.
Therefore, the 2004 Spring Summit under the Irish Presidency will be a decisive one.
UEAPME is convinced that the Irish Government- with whom UEAPME shares a similar
view on the Lisbon agenda- will do its utmost to help Europe progress in this field.
Furthermore, UEAPME knows that the Social Partners have also to play their role and to
strengthen their commitments towards economic and labour market reforms, if Lisbon is
to become a success. When reforms have to be implemented, the Social Dialogue
(tripartite and bipartite) can be a very helpful instrument on national and on European
level, if the dialogue is based on common goals and the partners are able to create longterm win-win situations. UEAPME is ready to take this responsibility, but as always in
dialogues, it also depends on the other partners.
UEAPME Secretariat
2004-02-16
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