19. Report on financial assistance for innovative and job creating SMEs (2000)
A5-0422/2001
European Parliament resolution on the Commission report to the European Parliament and the
Council: Growth and Employment Initiative 3dash Measures on financial assistance for innovativeand job-creating Small- and Medium-sized enterprises (SMEs) (COM(2001)399 3dash C5-0459/2001 3dash
2001/2183(COS))
The European Parliament,
7dash having regard to the Commission report (COM(2001)399 7dash C5-0459/2001),
7dash having regard to its resolution of 16 January 2001(
1) on the communication from the Commission on
the ‘Growth and Employment Initiative 7dash as at 31 December 1999’,
7dash having regard to the Council Decision 98/347/EC(2) on the growth and employment initiative,
7dash having regard to Rule 47(1) of its Rules of Procedure,
7dash having regard to the report of the Committee on Employment and Social Affairs and the opinion of
the Committee on Economic and Monetary Affairs (A5-0422/2001),
A. whereas the crucial importance of encouraging the promotion of SMEs in particular, and a regulatory
climate conducive to investment, innovation and entrepreneurship in general, throughout the EU and
candidate countries, was confirmed as a priority at the Lisbon European Council and in the Employ-
ment Guidelines 2001,
B. whereas the Growth and Employment Initiative was set up in 1998 as a multi-annual programme,
stimulated by the decision of the European Parliament to allocate €420 million for the purpose of thisprogramme,
C. whereas Parliament, in its resolution of 16 January 2001, clearly requested a statement from the EIB
to the effect that the available funds would not be allocated solely to small- and medium-sized enter-prises involved in high-technology and knowledge-based industries, but that small craft, trade andtourist firms and service enterprises, including in the third sector, would also have every opportunityto benefit from these appropriations,
D. whereas Decision 98/347/EC stated clearly that appropriate arrangements would be made to allow the
Court of Auditors of the European Community to exercise its mission in order to verify the regularityof payments made,
E. whereas there has been a significant increase in the availability of European venture capital in recent
years, although the European venture capital market still remains significantly behind the USA,in particular for seed and early stage capital,
F. whereas the majority of capital raised in Europe is not invested in Europe but actually invested in
America, as European investors have shown a preference for the higher rewards available in the USA,and have recognised that the lighter regulatory climate in North America makes it easier for entre-preneurs there to flourish by comparison with the EU,
G. whereas the new Multi-Annual Programme (MAP) approved by the Council on 20 December 2000
proposed modifications and extensions to the ETF start-up facility and the SME Guarantee facility,together with a simplification of the JEV programme,
(1) OJ C 262, 18.9.2001, p. 71.
(2) OJ L 155, 29.5.1998, p. 43.C177E/72 EN 25.7.2002 Official Journal of the European Communities
Tuesday 11 December 2001
H. whereas as at end-year 2000, 31,4% of overall available venture capital investment within Europe was
invested in high technology companies,
I. whereas the European Investment Bank (EIB) took a controlling interest in the European Investment
Fund (EIF) during early 2000,
J. whereas there has been a low level of activity regarding this initiative during late 1999 and early
2000, a time which appears to correspond to the restructuring period of the EIF,
K. whereas the 1999 Commission Report recorded that the EIF expected the ETF Start-up Facility to have
25-30 venture capital funds from all fifteen Member States,
L. whereas France and Germany account for over half of the take-up of investments in both the ETF
Start-up and the SME Guarantee Facility,
M. whereas the total number of SMEs benefiting from the SME Guarantee facility has surged to 40778 by
comparison with 7223 the previous year, and is currently increasing at a rate of 8000 per quarter,
N. whereas the ETF Start-up facility has recorded an actual increase of 785 jobs in the 71 investee SMEs
that received an investment before the end of 1999 or early 2000, i.e. an average of 11 new jobs percompany, while the SME Guarantee facility is forecasting an increase of 19084 new jobs within oneyear and a further 33934 within the second year, representing an average of 1,3 new jobs per com-pany,
O. whereas, in its resolution of 16 January 2001, Parliament asked for subsequent annual Commission
Reports to be made available to Parliament earlier than the end of May the following year,
P. whereas the EIF sends quarterly progress reports to the Commission, but not to Parliament,
1. Welcomes generally the content and analysis within the thorough and more comprehensive 2000
Report, and commends the Commission and the EIF where progress has been made;
2. Observes that the 2000 Report was not however officially published until mid-July 2001, after the
start of Parliament’s summer recess, even later than the 1999 Report, which Parliament complained wastoo late;
3. Notes that the ETF start-up facility now comprises 10 contracts signed by the EIF, two under process
and a further five approved in principle, altogether covering just eight Member States rather than thefifteen confidently predicted;
4. Welcomes the extra operational efforts being attempted by the EIF to stimulate activity in the seven
Member States not currently covered by successful ETF start-up proposals;
5. Wishes to see similar efforts being focused on the candidate countries, where appropriate;
6. Congratulates the EIF on the very significant increase in take-up of the SME guarantee facility;7. Seeks fuller information on the impact of the global technology stock-market downturn upon the
specific prospects and valuations of certain of the programme’s final investee SMEs, and the consequentchanges, if any, in investment policy in the year ahead;
8. Endorses the revisions to the MAP agreed by the Council in December 2000, observes with surprise
that there was no prior discussion with the Parliament about these proposals, and insists that the need forParliament to be involved ahead of such future discussions be fully recognised;25.7.2002 EN C177E/73 Official Journal of the European Communities
Tuesday 11 December 2001
9. Observes that while 15% of the SME beneficiaries of the SME Guarantee facility received pre-start
financing in 1999 before their establishment in 2000, all except six of these companies (i.e. 2269) were inFrance and Germany; asks that their success deserves detailed analysis in the next Commission Report;
10. Notes the new-found confidence in the re-shaped JEV facility, and looks forward to some early
concrete results;
11. Points out that there has been no mention of any auditing of any programmes being performed,
despite Decision 98/347/EC and despite the specific request of Parliament in the 1999 Report;
12. Notes with concern that a possible lack of management focus during the period of restructuring, as
predicted in its resolution of 16 January 2001, plus the complete change of the management team mayhave led initially to some of the impetus of the programme being lost, and trusts that the re-organisation isnow complete;
13. Notes that overall some very real progress has been achieved in the second full year of operation,
but gives notice that Parliament expects a substantial further improvement in performance in year three,
not just in terms of projects signed off but particularly in terms of concrete evidence of substantialemployment gains to-date;
14. Notes the risk that concentration on seed capital and start-ups underestimates other essential ele-
ments of the SME business cycle, i.e. ongoing business development, initial public offering or subsequentsale, each of which may have an impact on employment growth; asks for an assessment of the needs ofthese follow-up phases to be considered;
15. Notes that, in order to break into the technology market it is particularly difficult for SMEs in this
sector to obtain the necessary finance, and that the abovementioned financial instruments therefore have aspecially important role to play to that end, but that, on the other hand, particular care is needed in theevaluation of projects; notes in this connection that a number of private risk capital providers have beentoo hasty in quoting businesses on the stock exchange on the basis of particular expectations of yield, andhave thus contributed to the fall in the market in this area;
16. Stresses that financial instruments to promote small and medium-sized business must be in line
with the requirements of such businesses, in other words that they must be geared to the needs of SMEsin terms of transparent access to the relevant information, to straightforward application, authorisation andevaluation procedures and to the need for money at short notice, in particular it must possible for SMEs tofind out at an earlier stage whether they have any realistic chance of obtaining support; notes that smallfirms which have the potential for support still too often make no progress because 7dash owing to lack oftime and staff 7dash they are unable to access Community funds; points in this connection to the positive roleplayed by the Euro-Info-Centres, which could be expanded still further;
17. Calls on the Commission, through the abovementioned financial instruments, to step up its support
for projects which are most suitable for completion by small and medium-sized enterprises;
18. Expresses its concern about the excessively narrow concept of providing risk capital and global
loans mainly to SMEs engaging in life sciences, biotechnology, ITC and multimedia; calls on the Commis-
sion, the Council and the EIB to open up the facilities of the Growth and Employment Initiative also tosustainable high-tech sectors;
19. Reiterates its call to the Commission, the EIB and the EIF that available funds should not be allo-
cated solely to SMEs involved in high technology and knowledge-based industries, but that small craft,trade, tourism and service enterprises, including in the third sector, may also have full opportunity tobenefit;
20. Considers that the proposals for the new own capital rules for credit institutions (Basel II), due to
enter into force in 2005, will lead to a worsening of financing conditions for small and medium-sizedbusinesses; warns in particular of a likely drop in available risk capital if assessment continues to be on thebasis of historical data which start-ups cannot, of their very nature, provide;C177E/74 EN 25.7.2002 Official Journal of the European Communities
Tuesday 11 December 2001
21. Notes not only that the raising of capital, whether own or outside capital, is of vital importance to
small and medium-sized enterprises in the preparatory stage and later, but also that bureaucratic pro-cedures and rules jeopardise the success of these business and thus the creation and securing of jobs;
22. Calls on the Commission and the EIB to send a clearer message to finance intermediaries and busi-
ness support providers that raising female participation rates is an important part of the European employ-
ment strategy also in the field of supporting start-ups and SMEs;
23. Stresses, now that the Commission has announced in its SME multi-annual programme (2001-
2005) that it is withdrawing from the SME support programmes, that more scope must be given tosupport programmes at national and regional level;
24. Calls for the quarterly progress reports from the EIF to be made available to the Parliament at the
same time as they are made available to the Commission;
25. Calls for the Commission to be legally mandated to publish its Report on the year 2001 no later
than the end of May the following year;
26. Instructs its President to forward this resolution to the Council, the Commission EIF and the Court
of Auditors.25.7.2002 EN C177E/75 Official Journal of the European Communities
Tuesday 11 December 2001