Europe’s SMEs need one set of rules, report to say

By Giselda Vagnoni

(Reuters) – Europe’s export-oriented small businesses should be offered a single regulatory framework with the same rules governing their activities wherever they operate in the region, a report to be presented to national leaders next week will propose.

The report is being drafted by Enrico Letta, a former Italian prime minister, to find ways to bolster the European Union’s single market and so help boost its competitiveness against rival economies such as the United States and China.

Letta said Europe’s small and medium-sized enterprises (SMEs) should be able to opt for a newly created single framework instead of having to deal with different regulations and tax rules in the 27 countries of the European Union.

“I would call it Opt 28, a sort of legal passe-partout,” Letta told Reuters after presenting his draft proposals to EU commissioners in Brussels on Wednesday.

SMEs are typically defined as companies with less than 250 staff and turnover of less than 50 million euros. As such, they make up the overwhelming majority of companies in Europe.

Letta said his report would encourage further integration within the EU’s financial sector and propose ways to extend the EU’s 31-year-old single market, which currently offers freedom of movement for people, services, capital and goods across its national borders.

The report will call for the creation of a “5th freedom” of movement of knowledge and innovation to foster exchanges of know-how across the bloc.

“It is time for the single market to deal with intangible things such as data, education, skills, research, innovation,” Letta said.

One of the action points to promote cross-border knowledge is to give all EU high school students access to a paid-for education exchange programme in another EU country – something that currently only wealthy families can afford.

Letta said his “5th freedom” proposal would not require any change to EU treaties, something that requires unanimity among its member states. “Otherwise, the plan would have little credibility because it would be postponed forever,” he said.

The full report will be presented to EU leaders at a summit next week. It follows a six-month review in which Letta embarked on a tour of 65 European cities to meet governments, trade unions, banks, companies and others.

(Reporting by Giselda Vagnoni; editing by Mark John and Christina Fincher)