Mr. Daniel Calleja Crespo:

I thank the members for raising two such important issues, access to finance and cutting red tape. It is true that the level of debt is an important issue in terms of access to finance. Because of the financial crisis and the banking crisis we have seen many companies heavily in debt. Credit was easily obtained and in many countries the private sector has a huge amount of debt which has put their situation at risk. Many companies have failed. Another problem we have seen is that those who were unable to repay and who entered into bankruptcy proceedings are still involved in such proceedings. One of the big problems we have is the lack of effective bankruptcy procedures throughout the European Union which means that an honest entrepreneur who fails cannot get through the bankruptcy procedure quickly.

In addition, following the banking collapse, banks have become very careful and risk averse. To make things worse – this is a special feature of Europe – in Europe we have an excess of dependence on the banking sector. In other countries when a company wants to finance a project it goes to a bank, a fund or seeks venture capital but in Europe we have less venture capital than ten years ago. When the banking sector collapses then the economy collapses. That is why we strongly recommend the development of the non-banking sector because it allows one to have a more diversified system. That is the reason venture capital is so important and it is why in the European programmes we will have loan guarantees but we will also have the equity facility to facilitate venture capital, business angels, crowd funding and various other instruments.

As to what we can do about it, the macroeconomic situation will improve things. Everything has to be seen in an overall framework. The efforts which Ireland and all the other countries are making in pursuing the control of public finance will also have a positive impact on the economy. There have been reforms in the labour market and in the financial systems and they are having an impact on recovering from the economic situation, but that is not enough. We need to work together with the banking sector and with the business community to develop further possibilities. That is where action in terms of information comes into place.

We need to understand the needs of the small and medium enterprises and the position of the banks to see if we can together identify what would be the best practices and the best way forward.

The European programmes will play an important role. That is the reason I discussed with the Minister of State, Deputy Perry, this morning action in terms of information specifically directed to Ireland, if there is such a need. I was looking at the figures and Ireland did not use many of the previous programmes. There were only two operations since 2007. The first step was the micro credit guarantee and the Fountain Healthcare Partners fund. Those were the only two operations. The new programmes will come into place in the second half of the year, 2014 to 2020. They are not preassigned. If we have projects and there are opportunities, they can benefit. This is an important effort.

The issue of training was highlighted. Training for employees is very important, as is training for employers. In terms of the policies at European Union level, I point out that the issue of training is critical. It is also a challenge for an SME but skilled people are very important in terms of developing our business and our productive sector. We are facing a paradox in Europe. We have an unemployment rate for young people below the age of 25 of over 50% in many countries, including the southern countries, and a deficit of 1 million skilled workers in ICT. There is something wrong in our economy.

An effort has to be made to match the needs of business with the education sector, and some countries are doing that very well through the dual system. We need to anticipate business needs and get businesses closer to the education sector so that what the education sector delivers has employability opportunities in terms of the economy. We are doing that through best practices among member states but we have the European Alliance for Apprenticeships and the ERASMUS+ programme. There are many initiatives, and we are urging member states to improve that connection.

In terms of employers, the biggest challenge we have now is the digital divide. E-skills and the digital economy can multiply the chances of business for SMEs. We are putting in place programmes to facilitate access by SMEs to the e-economy. I met entrepreneurs recently in Barcelona who are starting up a company. One of them told me they had discovered, thanks to the digital economy, that they can multiply their business. They inherited a company that was selling paints to Morocco but they are now selling furniture, paints, shoes and various goods not only to Morocco but to Turkey and Italy. They were doing that because they were using digital technology. The digital economy is a multiplicator of the activities of the business model and the biggest challenge in the coming years is to link e-skills to the manufacturing sector, industry and services, and to multiply the possibilities. That is an area where we will have the possibility to finance programmes with the member states.

What can we do about bureaucracy? That is a very good question. Whatever we are doing, it is not enough. We need to examine this problem across the entire cycle. We are proposing that before a new rule is adopted each country, and the EU is already doing it ,should conduct the SME test. In terms of the impact of this rule on SMEs, if the impact is negative because it will increase the burden, the rule should be reconsidered. If for some overriding reasons it cannot be reconsidered, there should be a simplified process for SMEs.

We have proposed exempting micro-companies from legislation unless it is indispensable to cover them, in which case there should be a simplified regime. There have been diverging reactions to this proposal, including from the SMEs because some have told us they do not want to be above the law. They want to be covered but they want us to introduce simplification. However, we have to use electronic administration more often. In terms of the principle of only once, when one submits a document to the administration, one does not have to submit the same document to the different administrations because the document has already been submitted.

I refer to evaluation of existing legislation, the fitness checks to see if we can get rid of old texts which are no longer necessary, and the impact of legislation on competitiveness. Community assessment is not a new rule. It is that this rule comes on top of a number of rules and increases the burden. There are many things that can be done. There are many things we are doing. When the members were in Brussels I informed them about our initiative on the top ten worst pieces of EU law. We have done the consultation on the website. We asked people to tell us what are the ten worst EU laws. We had thousands of replies. We did a ranking. I regret to inform the members that one of them, which was under our responsibility, was the REACH legislation, registration of chemicals, which is very burdensome. Following that, we are reducing the registration fees for SMEs. We have appointed the special ambassador in the European Chemical Agency to deal with the SME problems, simplification of procedures and to see if we can facilitate that, but this must be done and scrutinised through all areas of legislation.

On facilitating the creation of companies, three days and €100, licensing is an issue. It is not enough to create the company. How long does it take to get a licence?

We have a big programme at EU level, and we must lead by example. We can also have targets. We used to have a target of 25%. We exceeded that target but what about putting that target at national or regional level? What about Governments on taking office saying that when they leave office they will have less of an administrative burden than was the case when they arrived? That is a challenge.

The Commission is preparing a very important communication for the June European Council. I will be in a position to send it to the members' Parliament in the coming weeks. This will be a refit programme on actions we are putting in place to reduce bureaucracy, but it has to be a permanent challenge and it must be introduced in the culture of the Administrations at all levels.