COSME: helping small businesses to grow and create jobs

Putting everyone to work and making our economies grow are among the main challenges we face in Europe today.

It's therefore a welcome development that the Council has now confirmed an agreement with the Parliament on the so-called COSME programme, which means Programme for the Competitiveness of enterprises and SMEs. This programme aims to support the competitive forces of companies, and notably small- and medium-sized enterprises (SMEs).

SMEs: an engine for job creation

Every time the private sector creates 100 new jobs, 80 of those are created by SMEs, which represent by far the most important job engine in Europe.

With the new programme in place for the next seven years (2014 - 2020), there will be 2.02 billion Euro available for entrepreneurs and SMEs, as well as entrepreneurship and SME-related activities.

It is especially important that we reserve a very large proportion of the funds for companies that face severe financial constraints due to the financial crisis and the reluctance of banks to provide capital to finance the growth and job-creation capabilities of SMEs. This was one of the priorities for the EPP Group.

How will the funds be used?

The main points in the agreement are:

• 60 percent of the funds will be used for alleviating the financing constraints, e.g. through the Loan Guarantee Facility, which covers loans up to 150 000 Euro and is available for all types of SMEs and through the Equity Facility for Growth that provides venture capital to enterprises, especially in their growth phase;
• 21.5 percent will be dedicated to promoting market access for SMEs;
• 11 percent will be used to reduce administrative and regulatory burdens and in other ways improve the framework conditions for SMEs;
• 2.5 percent goes to promoting entrepreneurship and entrepreneurship education - including the Erasmus for Young Entrepreneurs.

Less bureaucracy and more entrepreneurship

The EPP Group also insisted that the Commission's activities provided for in this programme have a strong focus on reducing the administrative and regulatory burden on SMEs. It is also important to highlight the Erasmus for Young Entrepreneurs programme.

Among the goals of the programme - besides the main objective of creating jobs – are, amongst others, achieving a marked reduction in the cost of starting up (372 Euro in 2012), a marked reduction in the number of days to set up a new SME (5.4 working days in 2012) and an increase of the share of SMEs exporting (25 percent in 2009) and exporting outside the EU (13 percent in 2009).

What now?

The Parliament and the Council having reached an agreement, the report on establishing the COSME programme will be voted by all MEPs in plenary at the end of October 2013 and the COSME programme should then start on 1 of January 2014.