WRITTEN QUESTION E-3156/98

by Felipe Camisón Asensio (PPE) to the Commission

(19 October 1998)

Subject: Coordination of aid to SMEs from the Commission and the EIB

Recently, the European Investment Bank granted a loan to four Spanish and one Portuguese savings institutions with the aim of setting up a risk capital fund of Ptas 10 000 million to finance innovative investment projects by small and medium sized enterprises (SMEs). Does the Commission consider that this type of action results in the strengthening of similar actions by the Commission? If so, how and to what extent?

Answer given by Mr de Silguy on behalf of the Commission

(27 November 1998)

At its meeting in Amsterdam in June 1997, the European Council resolution on growth and employment urged the European investment bank (EIB) to step up its activities promoting investment projects creating employment in the Community. In response the EIB established its Amsterdam special action programme (ASAP) on 20 August 1997. Under this programme the EIB set up an "SME window" to strengthen the capital base of innovative small and medium sized enterprises (SMEs) offering strong growth, particularly in relation to high technology. SMEs are crucial for job creation. Their development can be helped by the injection of equity, which in turn can also facilitate access to loan finance. The SME window involves a number of risk sharing global loans and a new European technology facility.

Under the risk sharing global loans the EIB makes funds available to partners from the European banking community to support SME activities under their own responsibility. The risk involved in these financing operations is shared by the EIB with the respective partner institution. The loan cited in the question is part of ten operations totalling ECU 277,8 million already concluded with institutions of nine Member States.

At the same time, the EIB has allocated ECU 125 million to the European technology facility (ETF) managed on its behalf by the European investment fund (EIF), to provide venture and equity capital to funds or venture capital companies which specialise in equity for SMEs in their early start-up phase or in expansion. Some ten participations are expected to leverage about ECU 500 million for SMEs.

The risks associated with these instruments are offset by drawing on up to ECU 1 000 million from EIB operating surpluses over the period 1997-2000.

In addition, the Luxembourg growth and employment initiative sponsored by the Parliament covered the setting up of financial instruments financed by the Community budget (ECU 420 million for the period 1998-2001) for innovative and job-creating SMEs. These instruments include a risk-capital facility (ETF start-up) managed by the EIF and targeted at the establishment and early stage of SMEs, a scheme on financial contributions for the establishment of transnational joint ventures (Joint European venture) and a SME guarantee facility managed by the EIF to increase the availability of loans to newly established enterprises.

Both initiatives aim to facilitate access to finance for job-creating SMEs, but differences exist, mainly in the risk approach (generally speaking, the Luxembourg initiative has a higher risk profile) and in the choice of intermediary institutions. The finance instruments of the Luxembourg initiative and the ASAP measures are distinct but complementary.