EU ministers responsible for economic affairs discussed this at the Competitiveness Council in Brussels. The eight countries have sent a joint non-paper to the European Commission on this matter, which is on the agenda of this Council meeting. Many other countries also support this initiative individually to arrive at a better definition.
The ratio of issued share capital to equity is different
Growing companies often have a different ratio between issued share capital and equity. In the current situation, for example, subordinated loans and other quasi-equity cannot be counted as full equity. As a result, start-ups often fall outside the definition, even though they are in fact viable.
The eight countries therefore propose including these forms of equity in the definition. Alternatively, they propose extending the grace period for growth-oriented SMEs to 15 years.
Minister Heleen Herbert (Economic Affairs and Climate):
"Start-ups and scale-ups, in particular, with their new innovations and technology, are indispensable for the transition to a sustainable economy and fewer strategic dependencies. The current Enterprise in Difficulty rules hinder their growth and, consequently, the ability of Europe and the Netherlands to remain competitive and innovative worldwide.
Together with 7 countries, we therefore propose that the European Commission primarily take steps by first improving the definition itself. It is good to see that even more countries support this. After all, with the current proposal containing only exceptions, we are merely pushing the problem for growth companies back a few years. I will continue to keep a close watch on this in the EU in the interest of our future economy.”
