Free smallest companies from financial reporting, Brussels urges EU

Feb 26, 2009, 13:08 GMT

Brussels - The European Union's executive on Thursday called on member states to free the bloc's smallest companies from the need to publish annual financial reports, saying that this could save 6.3 billion euros (8.1 billion dollars) a year in administrative costs.

'This is a real opportunity to make life easier for the EU's smallest companies,' EU Internal Markets Commissioner Charlie McCreevy said as he presented the initiative.

Under the proposal, which comes as the EU is fighting desperately to revive an economy devastated by the global financial crunch, firms with fewer than 10 employees or a turnover of less than 1 million euros would be freed of the need to publish full annual reports.

Instead, member states which accept the proposal would be allowed to demand information in other, simpler ways, such as in combination with tax or statistical requests.

The proposal comes as EU leaders are preparing for a series of summits within the bloc and with the world's other leading economies, aimed at re-writing the rules for supervising global financial markets in the wake of the credit collapse.

According to commission calculations, the proposal could save the average 'micro-entity' around 1,200 euros per year.

Member states and the European Parliament will have to approve the proposal before it can come into effect.