The UK’s Federation of Small Businesses (FSB) has claimed small businesses can help bring the European Union out of its economic depression, but said Brussels must take positive action to help them fulfil their potential.

The call coincides with the release of the European Union Small Business Act, which will set a framework for how the EU deals with SMEs – which make up 92 per cent of all EU businesses.

Tina Sommer, FSB EU and International affairs chairman, said: “Small businesses will make a vital contribution to bringing Europe out of its economic gloom, but the EU must release them from their administrative shackles and allow them to fulfil their potential.”

The Act is intended to drive the EU’s ‘think small first’ message into future legislation to take account of the burden that red tape can place on SMEs.

“The Small Business Act provides a critical opportunity to give Europe’s entrepreneurs a better deal. The European Commission’s proposals are a good place to start, but national governments must significantly beef up this document for it to offer tangible benefits to all small businesses.”

The FSB called for the Act to contain four ‘quick hit’ actions for small businesses including regulatory exemptions for micro enterprises (ones employing fewer than 10 staff), a small business element to impact assessments, EU common commencement dates (single days when new regulations come into effect to give a clearer overview of the volume of legislation and allow businesses to plan ahead) and a consultation period of at least 12 weeks.

Sommer added: “As Europe’s economy continues to slow down, our message to the EU is: help small businesses to help you.

“This may be an act for small businesses, but it must have bigger ambitions and concrete actions to be considered worthwhile by Europe’s entrepreneurs.”