The European Parliament’s legal affairs committee is at loggerheads with the economic affairs committee over a proposal to exempt micro-enterprises from the obligation to draw up standardised annual accounts.

The European Parliament will vote on the exemption next week (25 February), but its adoption is far from assured. The legal affairs committee, which takes the lead on the dossier, has given strong backing to the exemption, which was proposed by the European Commission in February a year ago. The committee approved it almost unanimously in a vote on 28 January.

Rejection

But the economic and monetary affairs committee (ECON) has taken a sharply different view, rejecting the Commission’s proposal in October by 33 votes to 8. The committee also voted that the Commission should present an “all-inclusive impact assessment that estimates and quantifies both advantages and disadvantages” of an exemption.

Dirk Sterckx, a Belgian Liberal MEP who drafted ECON’s opinion on the dossier, is attempting to raise enough support to vote down the legal committee’s report in next week’s vote.

The Commission has estimated that the exemption could save businesses €6.3 billion each year.

Opponents of the exemption include the European Association of Craft, Small and Medium-sized Enterprises, which argues that it would complicate the business environment, not least because individual governments would be allowed to decide whether to apply the exemption or not.

Fragmentation

ECON said in its opinion that the exemption would “lead to fragmentation of the single market” and that it would “dampen cross-border trade”. It said that it was “arguable” whether the proposal would lead to any significant overall reduction in the administrative burden on businesses.

The issue has split the Parliament’s political groups as well as member states (Germany and the UK have championed the idea, while Belgium, France, Greece, Italy, Portugal and Spain are resistant).

To be classed as micro-enterprises under EU law, companies have to meet two out of three criteria: ten or fewer employees, a balance sheet no higher than €500,000, and a net turnover of no more than €1 million.