EU smooths way for small firms

Entrepreneurs should be able to start a company within a week anywhere in the European Union by the end of 2007, under a smallbusinesses…

Entrepreneurs should be able to start a company within a week anywhere in the European Union by the end of 2007, under a smallbusinesses plan to be adopted by EU leaders in Brussels this week.

The heads of government will commit themselves at a two-day economic summit to create a system of one-stop shops or similar arrangements to allow companies to be set up within seven days.

The summit's draft conclusions say: "Start-up fees should be as low as possible and the recruitment of a first employee should not involve more than one public administration point."

The commitment will be welcomed by entrepreneurs who complain about the cost and complexity of starting a business inEurope, especially when compared with the US.

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The time for starting a business varies widely between member states. The Centre for European Reform, a London think-tank, reports today that start-up times vary from less than two weeks in Denmark, Finland, France, Italy and the Netherlands, to 54 days in Portugal and up to 60 days in Slovenia.

The cost also varies from nothing in Denmark to several thousand euros in Greece, while many members require entrepreneurs to make big cash deposits in a bank before gaining permission to start a business.

Günter Verheugen, EU enterprise commissioner, has admitted that in the past that the EU has been too concerned with helping big business and paid too little attention to the needs of smallcompanies.

Mr Verheugen's spokesman welcomed the draft summit conclusions and said he would be watching to monitor whether member states stuck to their promise.

The commissioner will also be asked at the EU's economic summit, starting on Thursday, to look at other means to reduce regulatory burdens, such as allowing small and medium-sized enterprises more time to comply with new legislation as well as "reduced fees, simplified reporting requirements and exemptions".

The summit will also commit Europe to a new energy policy, rubber-stamp national reform plans and propose a new European Institute of Technology, but the event is likely to be dominatedby a debate on growing protectionism in the EU.

A report by Britain's house of lords calls for the completion of the single market and urges the European Commission to crack down on protectionism.

Separately, the Centre for European Reform says in its report on the implementation of the EU's Lisbon economic reform process that Denmark deserves "hero" status. Italy, Greece and Portugal have a relatively poor record, but that Poland is the "villain". - (Financial Times service)