Article 157 of the Treaty establishing the European Community has assigned to the Community and the Member States the task of ensuring that the conditions required for the competitiveness of the Community's industry exist.

In order to achieve greater transparency and efficiency in enterprise policy and to enable it to play a more strategic role in meeting challenges in the knowledge-driven economy, the EPG should comprise two sections, the first comprising representatives from the Member States, and the second comprising eminent persons, chosen by the Commission from a wide range of highly and appropriately qualified applicants, active in industry, services, the business community or in fields of activity linked to the development of innovation and the knowledge-driven economy.

In order to allow adequate representation of the Directors-General of industry and of the national authorities responsible for small and medium-sized enterprises (SMEs), it is appropriate that the Members States may appoint up to two representatives for the first section.

The EPG should therefore be set up and its terms of reference and internal organisation should be defined.

In order to guarantee an adequate representation of SMEs, a fixed allowance should be provided for those participating in the work of the EPG who are employed by an SME.

The Committee on Commerce and Distribution and the Consultative Committee for Cooperatives, Mutual Societies, Associations and Foundations should be dissolved,