WRITTEN QUESTION E-0369/00

by Ilda Figueiredo (GUE/NGL) to the Commission

(14 February 2000)

Subject: Socio-economic impact of the initiative on employment

The Luxembourg extraordinary summit of November 1997 launched an initiative on employment to be implemented over three years with a budget of c. EUR 450 million. It was incorporated into chapter B5.5 of the Community budget, in the shape of support measures for SMEs and innovatory labour market initiatives.

Can the Commission say:

- What is the breakdown by Member States of the allocation of the amounts entered under each heading of chapter B5.5?

- How many jobs did these measures create in the EU and in each Member State (bearing in mind that the Commission made a similar assessment of the ELISE programme)?

Answer given by Mr Solbes Mira on behalf of the Commission

(3 April 2000)

Following the Luxembourg extraordinary European Council on employment, the budgetary authority created a new heading B5-5 Labour markets and technological innovation for the financing of 450 million over three years (1998-2000).

On the one hand, in 1998, three budget lines (B5-500, B5-5010 and B5-5020) earmarked 30 million for funding different activities related to the implementation of the employment title of the EC Treaty and, in general, of the employment strategy. Such activities sought to identify and promote the exchange of good practices between Member States and to support underpinning innovative actions and projects and research related to Member States' employment policies.

On the other hand, 120 million was allocated to the growth and employment initiative, a programme of financial assistance for innovative and job creating small and medium-sized enterprises (SMEs). To this figure can be added an amount of 5 million, corresponding to the Joint European Venture (JEV) pilot action (B5-512). For the years 1999 and 2000 an amount of 300 million was allocated to the growth and employment initiative.

The growth and employment initiative includes three complementary facilities: a risk-capital scheme European technology facility ((ETF) start-up) managed by the European investment fund (EIF), a scheme for financial contributions supporting the creation of trans-national joint ventures by SMEs within the Community JEV managed by the Commission and a guarantee scheme (SME Guarantee Facility) managed by the EIF.

As far as the ETF start-up facility is concerned, the Commission has approved investment commitments to nine funds, selected by the EIF for a total of up to 54 million. The breakdown by Member State is shown in Table 1 which is sent directly to the Honourable Member and to Parliament's Sercetariat.

As regards JEV, the Commission approved 65 projects: 53 joint venture projects and 12 promotion facilities. The 53 joint venture projects involved 115 SMEs. The breakdown by Member State of the SMEs involved in the projects and the foreseen location of the joint venture is shown in Table 2 which is sent directly to the Honourable Member and to Parliament's Sercetariat.

As regards the SME guarantee facility, the Commission has approved commitments to fifteen financial intermediaries selected by the EIF for a total of up to 90 million. The breakdown by Member State is shown in Table 3 which is sent directly to the Honourable Member and to Parliament's Sercetariat.

In relation to the ETF start-up facility, latest available figures show 49 Community SMEs have received an investment from the funds participating in the facility. Detailed information on the employment creation perspectives of the ETF start-up facility will become available in August 2000 when the EIF will have received the first completed annual questionnaires from SMEs.

As far as JEV is concerned, it is too early to predict figures for job creation. The first stage of JEV support is linked to a preparatory work phase and it is only thereafter that the SMEs will decide whether, and under what conditions, the joint venture will be undertaken. Nevertheless, even in this very first phase, SMEs have been asked to estimate the number of jobs that could be created. Based on this, for the 53 joint venture projects approved and according to the declarations made by the applicants, the total job creation could be 788 jobs (or an average of 15 jobs per project).

As regards the SME guarantee facility, latest available figures show 7 223 SMEs have benefited from the SME guarantee facility and have declared that they have 32 869 employees. Also for this facility the SMEs are required to estimate the number of jobs that should be created in the near future. Based on their declaration, the total expected number of jobs one year after the signing of the loan agreement is 34 319, i.e. an increase of 1 450 employees. This is expected to increase to 36 988 after another year, i.e. a further increase of 2 669 employees. This would mean an overall increase of 13 % over two years.