UK and France urge EU to do more to help small businesses

By Adrian Croft

LONDON (Reuters) - The leaders of Britain and France urged the European Union on Wednesday to do more to help small businesses and to boost firms' access to finance at a time when funds are scarce because of the credit crunch.

"We are writing to you to express the high priority that we attach to Europe promoting the growth of small and medium-sized enterprises (SMEs)," Prime Minister Gordon Brown and French President Nicolas Sarkozy wrote in a letter to European Commission President Jose Manuel Barroso and other EU leaders.

"Their continued success is key to the future prosperity of the European economy," they wrote.

The letter is the latest joint initiative by Brown and Sarkozy, who won backing from EU leaders last month to study if sales tax on green products could be cut.

Brown and Sarkozy, joined by the leaders of Germany and Italy, also proposed measures in January to tackle global financial turmoil, including backing closer economic cooperation.

France's partnership with Germany has been the traditional engine of the EU, but Sarkozy said during a visit to London last month he wanted a new "Franco-British brotherhood".

In their latest letter, released by Brown's office, Brown and Sarkozy said they supported plans by the EU's executive Commission to propose a Small Business Act later this year.

They said they were concerned that there were areas where SMEs' access to commercial loan finance and venture capital was not ideal.