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Saturday, 20.04.2024, 07:06
Business as the EU and member states’ agenda
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The Commission’s ‘EU- 2020’ Strategy (see IP/10/225) calls for improvement of the business environment in Europe. EU company law and corporate governance rules for companies, investors and employees must be adapted to the needs of today’s society and to the changing economic environment. Companies are going to be competitive and sustainable through European company law and corporate governance.
With its Green Paper in 2011on EU corporate governance (IP/11/404), the Commission initiated an in-depth reflection to evaluate the effectiveness of the current corporate governance rules for European companies. It also carried out an on-line public consultation on the future of European company law, which generated a large number of responses by a wide variety of stakeholders (IP/12/149; see also MEMO/12/972).
In traducing the Commission’s action plan, the EU Internal Market and Services Commissioner Michel Barnier said that the plan sets out the way forward for European companies (mainly through company law and corporate governance). It means that shareholders should receive additional rights, but also fully assume their responsibilities to make sure that the company remains competitive over the longer term. Companies should also become more transparent; that will contribute to effective governance of companies.
Source: http://ec.europa.eu/enterprise/newsroom.
Action Plan: Key elements
- Increasing the level of transparency between companies and their shareholders in order to improve corporate governance. This will include in particular:
• Increasing companies' transparency as regards their board diversity and risk management policies;
• Improving corporate governance reporting;
• Better identification of shareholders by issuers;
• Strengthening transparency rules for institutional investors on their voting and engagement policies.
2. Initiatives aimed at encouraging and facilitating long-term shareholder engagement, such as:
• More transparency on remuneration policies and individual remuneration of directors, as well as a shareholders' right to vote on remuneration policy and the remuneration report;
• Better shareholders' oversight on related party transactions, i.e. dealings between the company and its directors or controlling shareholders;
• Creating appropriate operational rules for proxy advisors (i.e. firms providing services to shareholders, notably voting advice), especially as regards transparency and conflicts of interests;
• Clarification of the 'acting in concert' concept to make shareholder cooperation on corporate governance issues easier;
• Investigating whether employee share ownership can be encouraged.
3. Initiatives in the field of company law to support European businesses and encourage their growth and competitiveness:
• Further investigation on a possible initiative on the cross-border transfer of seats for companies;
• Facilitating cross-border mergers;
• Clear EU rules for cross-border divisions;
• Follow-up of the European Private Company statute proposal (IP/08/1003) with a view to enhancing cross-border opportunities for SMEs;
• An information campaign on the European Company/European Cooperative Society Statute;
• Targeted measures on groups of companies, i.e. recognition of the concept of the interest of the group and more transparency regarding the group structure.
In addition, the action plan foresees merging all major company law directives into a single instrument. This would make EU company law more accessible and comprehensible and reduce the risk of future inconsistencies.
The EIB’s activity
The European Investment Bank confirms that its shareholders, i.e. the 27 EU Member States, have approved a € 10 billion capital increase. The capital increase will allow Europe’s long-term lending institution to provide up to € 60 billion, over a 3-year period, in additional lending for economically viable projects across the EU.
In early 2012 the European Council asked the European Investment Bank to examine how to increase support for growth and the June 2012 European Council recommended that the bank’s capital be strengthened to allow an increase in lending activity. Unanimous support for increasing the paid-in capital of the EIB was reached following detailed examination of proposals for increased lending activity by the 27 EU member state shareholders.
The additional capital to be paid in by each shareholder will reflect their current shareholding. The additional lending will target four priority sectors and be dedicated to supporting innovation and skills, SMEs, clean energy and modern infrastructure. The new financing will be in addition to the € 50 billion regular annual lending.
“The unanimous decision by the Governors of the European Investment Bank to strengthen the bank’s capital base and enable an additional € 60 billion of increased lending demonstrates a shared desire to support investment that will create jobs and contribute to economic growth in Europe. We are committed to working with national authorities, public investors and private business to ensure effective use of the additional lending across all member states and to unlock significant private investment for projects”, said Werner Hoyer, President of the European Investment Bank.
Entrepreneurship in the EU
Almost 4 out of 10 Europeans would like to be their own boss if they could. If this potential could be tapped, millions of new businesses could be added to the almost 21 million small and medium-sized enterprises (SMEs) in the EU.
Various obstacles prevent Europeans from opting for self-employment, in particular fear of bankruptcy and risk of irregular income. The Flash Eurobarometer "Entrepreneurship in the EU and beyond", presented by European Commission Vice President Antonio Tajani at SME Summit in 2009, showed that more Europeans (45%) wanted to be self-employed. This is a drop of 20% within three years, which reflects the current economic situation with its less promising business prospects.
According to the Commission, there are still millions who consider becoming their own boss, driven by the prospects of personal independence, better income and freedom to choose the place and time of work. To unlock the enormous potential of millions of would-be entrepreneurs, the European Commission launched a European Entrepreneurship Action Plan to boost entrepreneurship at all levels, aiming to bring growth and employment back to Europe.
Desirability of self-employment reflects large differences between the EU member states; the main results of the recent Eurobarometer survey can be summarised as follows:
• 37% of EU respondents would rather be self-employed, while a majority (58%) would prefer to be an employee. Self-employment is generally more popular among non-EU countries;
• In 2009, 45% wanted to be self-employed. Europeans stress the lack of financial resources as well as their lack of skills as reasons for not regarding self-employment as a feasible career, not to mention the current economic climate with less promising business prospects;
• Lithuania and Greece are most interested: Respectively 58% and 50% of respondents would rather be self-employed. Self-employment is least popular in Sweden (22%), Finland (24%), Denmark (28%) and Slovenia (28%);
• Men and young people (42% and 45%) are more interested in being self-employed than women (33%) or older people (36%);
• 43% of EU respondents say they would be afraid of the risk of going bankrupt (-6 points compared with 2009 survey), while 33% say that the risk of irregular income would make them afraid of setting up a business (-7 points);
• Self-employment is more popular in many non-European countries, namely China (56%), Brazil (63%) and Turkey (82%);
• Preference for self-dependence decreased in the US and Asia . Thus, in China from 71% to 56% since 2009, while the preference for working as an employee has increased from 28% to 32%. In the US the preference for employee has notably increased from 37% to 46%;
• Several reasons not to start a business. Over 40% of EU respondents say they would be afraid of the risk of going bankrupt, while 37% say that the risk of losing their property/home would concern them the most. Other difficulties are lacking financial support and complex administrative procedures. More than 50% think that it is difficult to obtain sufficient information on how to start a business;
• Key considerations for starting a business. About 90 per cent of Europeans who have started a business says that having an appropriate idea was an important factor, as well as having necessary financing for 84% of them. Other important factors are appropriate business partners, role models, addressing an urgent social or ecological need and dissatisfaction with their previous work situation;
• New entrepreneurs are positively perceived. About 87% of Europeans agree that entrepreneurs are job creators and 79% think that they create new products and services, which benefit the whole society.
EU Entrepreneurship Action Plan
The Entrepreneurship Action Plan is a blueprint for decisive action to unleash Europe's entrepreneurial potential, to remove existing obstacles and to revolutionise the culture of entrepreneurship in Europe. Investments in changing the public perception of entrepreneurs, in entrepreneurship education and to support groups that are underrepresented among entrepreneurs are indispensable for creating optimal business climate.
The EU insists that large number of Europeans shall recognise entrepreneurial career as a rewarding and attractive option.
The Entrepreneurship 2020 Action Plan is built on three main pillars:
= Entrepreneurial education and training;
= Creation of an environment where entrepreneurs can flourish and grow, and
= Developing role models and reaching out to specific groups whose entrepreneurial potential is not being tapped fully or who are not reached by traditional means for business support.
The European Commission is ready to help the member states administrations implement the Entrepreneurship 2020 Action Plan by providing its own expertise and foster peer learning and exchange of good practices with other Member States.
On a national level, it is the SME envoy, appointed by the respective national government, who is responsible for driving the implementation of the Action Plan.
Source: http://ec.europa.eu/enterprise/policies/sme/entrepreneurship-2020/index_en.htm
Regional aspect in developing SMEs
In order for SMEs to flourish, it is vital for a winning concept to boost competitiveness and shape a sound business environment. There are over 23 million SMEs spread out all over Europe; their work is influenced in many ways, not only from EU and national level but also from regional policies.
It is very important for the economic tissue of a region to maintain a broad base of SMEs, and thus for its wealth and sustainability.
The EU contributes to its member states, as well as its regions, success in this area by providing analysis, inspiration, programs and initiatives.
The European Commission prepared and disseminated guidebooks for regional authorities based on the sound knowledge and rich experience that DG ENTR has acquired in the field of SME’s policy analysis, development and implementation.
These guidebooks offer inspiration, tested examples, practiceal help and hands-on advice gathered by SME Policy expert groups. Many of the best practices identified by these expert groups need financial support for their implementation for which financing by structural funds (ERDF and ESF) is available, in particular also at regional level.
Each guidebook deals with a specific area of SME policy and includes suitable examples of recent and similar projects. A general guide (nr.6) provides a broad overview of the way in which the process works.
This series of Guidebooks is thus highly recommended to those involved in SME Policy as well as regional development, in the hope of raising further awareness regarding EU SME Policy and facilitating the funding process of appropriate SME policy measures and initiatives at national and regional level.
Source: http://ec.europa.eu/enterprise/policies/sme/regional-sme-policies/index_en.htm.
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