Romanians fear their businesses might go bankrupt because of the rigorous conditions imposed by the European Union following Romania’s accession to the EU, taking into consideration the previous experiences of Poland and Hungary’s small and medium enterprises (SMEs).

The head of the Romanian National Agency of SMEs Eugen Chirovici answered questions for Hotnews regarding the new provisions of the Fiscal Code and the experience of the member states that adhered to EU in 2004. What might be the cause of the hysteria around the bankruptcy of SMEs?

Eugen Chirovici: The cause of this fear is the lack of correct information about the rigorous rules of the community market and the measures the entrepreneurs must take in order to prepare for the European competition.

Most of the talks regard the challenges and not the opportunities while for Romanian companies the accession to EU entails in the first place the access to the common market that boasts 450 million consumers. Following this wave, the EU is expected to become the greatest exporter worldwide, with 20% of the world export.

The community internal commerce will grow 9% due to the lift of tax barriers, and Romanian products must compete with the European ones. What happened with Hungary, Czech Republic or Poland after May 1, 2004?

Eugen Chirovici: Over half of the SMEs in Hungary and Poland disappeared after the EU accession and difficulties will not pass by Romanian SMEs, however, what needs to be taken into account is that the SMEs must focus on development and not on consume, as the lack of a strategy and of co-financing funds will lead to bankruptcy.

It is important that the acquis communautaire together with financial laws on public procurement and subventions be well known.

According to the Polish Agency for Entrepreneurship Development, 4,600 companies out of 3.5 million SMEs disappeared in the first year after the accession, i.e. 0.1% of the total number of SMEs. The statistics show that the number of the new companies set up after the accession was higher than the ones going bankrupt.

In Hungary, 74% of the projects applying for structural funds represented the SMEs. Out of 10,000 applications in 2004, over 6,000 received financing of 330 million Euros. Does the Agency you are hading have a plan for encouraging the private initiative?

Eugen Chirovici: There is more than a plan, we have a series of programmes for entrepreneurial education such as the “Start” programme addressing young people between 18 and 35 years and the one for female managers. Are you acting towards the training of current and future entrepreneurs for setting up more professional business plans?

Eugen Chirovici: The Agency concluded the Consultancy and Training Programme that allowed the applicants to address the specialized companies. How much money will come to Romania for supporting the SMEs?

Eugen Chirovici: 17 billion Euros, out of which 2.5 go to the Operational Programme for Growing Economic competitiveness which entails 31% of the money destined to SMEs.