WRITTEN QUESTION E-0743/04 by José García-Margallo y Marfil (PPE-DE) to the Commission. MEDA programme and regions.
Date: 2004-03-11
Institutions: European Parliament, Provisional data
Subjects: Community of Valencia, European neighbourhood policy, Union for the Mediterranean, development aid, economic cooperation, regional cooperation, regional government

3.4.2004

EN

Official Journal of the European Union

C 84 E/863

It is widely accepted that the tax burden on labour is a crucial determinant of labour supply decisions,
notably for low-income earners, people starting their working career and members of single earner
households with children (1). However, there is insufficient empirical evidence on the macroeconomic
effects on employment of the reduction in tax and social security contributions (2), despite the results of the
mentioned modelling researches. An accurate evaluation of net effects on employment should take into
account the dead-weight, and the substitution and displacement effects. And these effects are difficult to
evaluate.

As mentioned earlier there is still
insufficient research evidence on the macroeconomic effects of a
reduction in tax and social security contributions. However, there is some evidence on the double dividend
effect, obtained in macroeconomic simulation studies. These studies generally show that environmental tax
reforms may have a small positive impact on employment without jeopardizing budget stability, when the
revenues from increased environmental taxes are used to reduce employers’ social security contributions.
We expect to be able to provide some more information on the effects of a reduction in tax and social
security contributions in the EC publication ‘Employment in Europe 2004’.

(1) See for further information the EC publication ‘Employment in Europe 2003’, September 2003 (Chapter 3).
(2) Some indications can be found in the ‘Impact evaluation of the European Employment strategy. Technical analysis’
from the Commission and in the OECD (1999), ‘Benefit systems and work incentives’ but also in the EC Economic
Paper No 183 ‘How much has labour taxation contributed to European structural employment?’, dated May 2003.
See for further information http://europa.eu.int/comm/employment_social/employment_strategy/impact_en.htm

(2004/C 84 E/0955)

WRITTEN QUESTION E-0743/04

by José García-Margallo y Marfil (PPE-DE) to the Commission

(11 March 2004)

Subject: MEDA programme and regions

As a Mediterranean region, Valencia has important social and economic links with its neighbouring
countries and regions.

In connection with the forthcoming review of the MEDA programme budget, has the Commission taken
into account the possibility of coordinating activities with regional governments in Mediterranean areas?
Are there any studies on the feasibility of creating interregional structures within the Mediterranean basin
in order to improve economic cooperation and increase development aid in the area?

Answer given by Mr Patten on behalf of the Commission

(15 April 2004)

The Commission attaches particular importance to the role of regions and local authorities in the Euro-
Mediterranean partnership. One of the objectives of that partnership is to involve the public and civil
society more closely. Local and regional authorities are important and useful partners in the creation of a
Euro-Mediterranean partnership that is close to the people and the Commission welcomes their growing
interest in cooperation with Euro-Mediterranean partners.

On 22 February 2002 in Barcelona, the mayors of Euro-Mediterranean cities were united in the desire to
inject new dynamism into the Euro-Mediterranean partnership and create a forum for dialogue, exchanges
and cooperation. Their declaration, referred to as the Euro-Med Pact, was the result of a very long-standing
wish on the part of the cities to have their own forum within the Euro-Mediterranean framework. The
Valencia Action Plan, endorsed by the Euro-Mediterranean Foreign Ministers on 23 April 2002, ‘welcomed
the Declaration of the Meeting of Euro-Mediterranean cities held in Barcelona last February. It also agreed
that the Euromed Pact proposal presented by Eurocities merited further study.’

C 84 E/864

Official Journal of the European Union

EN

3.4.2004

In 2003, following on from these political decisions and declarations, the Commission launched a pilot
programme on cooperation between Euro-Mediterranean cities (Medact) with the objective of making a
start on the first projects. The work done so far demonstrates that the local authorities are both willing and
able to play an active part in Euro-Mediterranean cooperation programmes. It was decided during the
regional programming exercise for 2005-2006 that this work should be supported and developed through
a cooperation programme for Euro-Mediterranean cities and local authorities (Medact), with the aim of
developing cooperation, exchanges and dialogue between them. EUR 5 million has been allocated for this.

Lastly, the Commission is planning to set up a new neighbourhood instrument in 2007. It will provide
European regions and local authorities with a framework for working with southern-Mediterranean
partners on cross-border and trans-national cooperation programmes and projects.

The Commission is confident that these cooperation instruments will pave the way for more active and
more concerted involvement by European towns and regions in the Euro-Mediterranean partnership.

(2004/C 84 E/0956)

WRITTEN QUESTION E-0745/04

by José García-Margallo y Marfil (PPE-DE) to the Commission

Subject: Facilitating access by SMEs to risk capital

(11 March 2004)

What action has the Commission taken during the current parliamentary term in order to facilitate access
by European SMEs to risk capital?

Answer given by Mr Liikanen on behalf of the Commission

(16 April 2004)

Access to finance, in particular risk capital, is an important part of the Commission’s policy of encouraging
entrepreneurship in Europe. Throughout its term this Commission has been active both in stimulating the
provision of formal and informal risk capital to firms, and in improving the framework conditions of
finance that have removed obstacles and enabled entrepreneurs to fulfil their ambitions.

The Commission has stimulated the provision of risk capital through the European Technology Facility
(ETF) Start-up Scheme, managed by the European Investment Fund (EIF). This instrument was introduced
in the Growth and Employment Scheme (1998-2000), set up by the demand of the Parliament. The
programme was fully implemented from 1999 onwards and the instrument was continued in the
Multiannual Programme for Enterprises and Entrepreneurship (2001-2005). The ETF Start-up scheme has
increased the supply of venture capital to small and medium-sized enterprises (SMEs) in the early stages of
development and in the high technology sectors where there is a market failure.

By the end of September 2003, EUR 151 million had been invested in 21 venture capital funds under the
ETF Start-up Scheme, which has allowed the mobilisation of at least EUR 558 million of funding from
other sources. 240 companies with high growth potential have benefited from ETF Start-up. Although the
last three years have been very difficult in the risk capital markets, a further positive influence on job
creation can be expected in the next year or
two, particularly in information technology and
investments means that although
biotechnology/life sciences. The revolving nature of risk capital
investments are risky, successful ones will be returned, with profit, to the Community budget. It should
also be mentioned that under the SME Guarantee Facility, a contract has been signed providing guarantees
for equity investments in regional venture capital funds. The external evaluation of the SME assistance
schemes of the Commission concluded that the ETF Start-Up Scheme and the SME Guarantee Facility have
been efficient ways of helping SMEs.