WRITTEN QUESTION E-2823/99

by Herbert Bösch (PSE) to the Commission

(18 January 2000)

Subject: Financial assistance for innovative and job-creating SMEs

The 1998 European Union budget allocated EUR 150 million to an employment initiative. These funds were primarily intended to support innovative small and medium-sized enterprises.

In accordance with Council Decision 98/347/EC(1), on 24 July 1998 the Commission concluded cooperation agreements with the European Investment Fund on implementing financial assistance for innovative and job-creating SMEs.

1. How was this employment initiative implemented?

2. Who received financial assistance?

3. What is the utilisation rate for this scheme?

(1) OJ L 155, 29.5.1998, p. 43.

Answer given by Mr Solbes Mira on behalf of the Commission

(27 March 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). In 1998 30 million was allocated for innovative actions and projects in the labour market and 120 million was allocated to the Growth and employment initiative. 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.

1. Following the above mentioned budget decision, Council Decision 98/347/EC of 19 May 1998 on measures of financial assistance for innovative and job-creating small and medium-sized enterprises (SMEs) the growth and employment initiative, approved a programme of financial assistance for innovative and job creating SMEs. The programme consists of 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.

2. ETF Start-up facility

The budget allocation concerning the ETF Start-up facility is paid to the EIF, which invests in selected venture capital funds. After signing agreements with the funds, the EIF successively releases the committed amounts to the venture capital funds. These funds then invest in innovative or early stage SMEs, which are the final beneficiaries of the facility. Latest available figures show 49 Community SMEs received venture capital investments under this facility.

JEV

SMEs can benefit from JEV by channelling their applications through a financial intermediary (FI) member of the JEV FI network. SMEs have direct access to Community funding via the FIs. Latest figures show 84 financial intermediaries are members of the network in all the 15 Member States and Norway. As far as the 53 current investment projects are concerned, 111 SMEs are involved, 90 of which have fewer than 50 employees and 45 fewer than 10 employees. SMEs from nearly all Member States are participating. SMEs from Spain, France, Italy, and the United Kingdom, are the most active so far. Joint ventures to be created are located in 13 Member States and mostly in Belgium, Spain, France, Italy and Portugal.

SME guarantee facility

The budget allocation concerning the SME guarantee facility is paid to the EIF, which signs guarantee agreements with selected financial institutions involved in financing SMEs. The EIF successively releases the amounts committed to these institutions, to cover a part of the SMEs' loan losses whenever these are incurred. Latest available figures show 7 223 SMEs benefiting from a guarantee under this facility is 3 472 start-up SMEs were created from 1998 to 1999.

3. ETF Start-up facility

The Commission has approved investment commitments to nine funds selected by the EIF, for a total of up to 54 million. Altogether, these nine funds are expected to raise a total pool of capital of 306 million. The EIF signed contracts with seven of these funds for a total amount of 38 million whereas other investors committed further 151 million. Latest available figures show these seven funds had invested 20,2 million.

JEV

Latest available figures show 104 applications have been submitted for a global amount of approximately 8,75 million. The Commission has so far approved 65 applications for a budget of 5,50 million, of which 4,55 million come from the pilot action budget.

SME guarantee facility

The Commission has approved commitments to 15 financial intermediaries selected by the EIF for a total of up to 90,2 million. The EIF has signed contracts with all 15 financial intermediaries. According to latest available figures the average utilisation rate of the EIF guarantees was 19,2 % (=actual volume guaranteed by the EIF/maximum contractual volume to be guaranteed by the EIF). The FIs have not claimed any loan defaults of the SMEs from the EIF so far.