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POSITION PAPER OF THE REPUBLIC OF LATVIA
Chapter 16: "SMALL AND MEDIUM SIZED ENTERPRISES"

Setting the time frame for the process of adoption and implementation of acquis communautaire the Latvian Government adopted 1 January 2003 as the date on which Latvia will be prepared for accession to the European Union.

Latvia accepts and will implement in full the acquis communautaire in the area of "small and medium undertakings" till 1 January 2003. Where it is possible Latvia is ready to adopt and fully implement Community Law even sooner. Certain provisions of acquis communautaire applicable exclusively to the Member states will be fully implemented as from the date of accession.

Latvian policy toward SME`s is already largely in line with the Community legislation.

The base for contribution to SME development is Latvian SME Development National Programme for years 1997 - 2001 accepted in 1997. National programme contains definition of SME`s and it is similar to the EU definition:

Small enterprises

• employees 0 âÀ“ 49

• annual turnover less than 7 MECU

• assets less than 5 MECU

Medium sized enterprises

• employs 50 âÀ“ 249

• annual turnover less than 40 MECU

• assets less than 27 MECU

Major part of SME`s development support measures is in place. National programme contains development of all necessary support measures. Insufficiently effective now are financial support measures.

Support of SME`s development is set as priority in following documents:

1)    National Programme for Integration in EU

2)    Middle term Economic Development Strategy

3)    National Programme of SME`s Development

4)    Conception of State support for Entrepreneurship

5)    National Programme of Quality assurance

6)    Programme for Development of Specially Sustainable Regions

7)    National Development Plan for accumulation of Pre-structural Funds

8)    Declaration of Cabinet of Ministers

9)    Programme for Rural Development

The aforementioned documents form the framework of priorities for SME`s development policy and provide for main directions of support in Latvia.

Support for SME`s development is determined and regulated by the Law "on control of state and municipal support for enterpreneurship".

The issue still to be solved before the accession is insufficient accesses to financial resources by SME's. The Cabinet of Ministers accepted on 15 November 1999 a SME loan project. The project's aim is to increase  Latvia's SME competitiveness and to resolve financing problems of start-ups. The Latvian Mortgage and Land Bank will implement it as a pilot project for introduction of loan scheme for start-ups and SME in Latvian banks. Involvement of banks will ensure efficiency of financing system for start-ups and SME.

Taking into account the aforementioned, the Republic of Latvia will not request any derogation or transitional period and proposes that the negotiations within chapter "Small and Medium Enterprises" be  considered as provisionally closed.