Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions - Removing obstacles to cross-border investments by venture capital funds {SEC(2007) 1719}
Date: 2007-12-21
Institutions: European Commission
Subjects: EU financing, EU programme, investment abroad, investment aid, research and development, small and medium-sized enterprises, venture capital

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 21.12.2007 
COM(2007) 853 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE 
EUROPEAN PARLIAMENT, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Removing obstacles to cross-border investments by venture capital funds 

{SEC(2007) 1719} 

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1. 

FINANCING GROWTH AND INNOVATION 

In  a  highly  competitive  global  economy,  improved  access  to  financing  by  innovative  small 
and  medium-sized  enterprises  (SMEs)  has  become  essential  for  enhancing  competitiveness 
and meeting the objectives of the Lisbon Partnership for Growth and Jobs.  

Raising capital is one of the preconditions for successfully setting up a business and ensuring 
its further expansion. Relying  on own resources or debt financing is often not sufficient for 
SMEs  in  their  early-stages  or  those  with  high-growth  potential.  Many  investors  are 
reluctant to invest in such firms due to high transaction costs, and because they estimate that 
the expected returns do not compensate for risk. Such companies typically look for venture 
capital1 that can provide them with amounts to break into markets and grow faster. Although 
venture capital is a small part of the larger asset class of alternative investments, it is essential 
for the growth of innovative firms. 

The  fragmentation  of  the  European  Union’s  venture  capital  markets  along  national  lines 
seriously  limits  the  overall  supply  of  early-stage  capital  for  innovative  SMEs.  As  a 
consequence, in Member States, where the market is new, venture capital funds face problems 
reaching  the  critical  mass  they  need  to  spread  their  portfolio  risk  and  cover  their  costs. 
Facilitating cross-border operations could help them to overcome this hurdle and increase the 
overall supply of early-stage capital. 

In its Communication “Financing SME Growth – Adding European Value”2 of June 2006, the 
Commission  outlined  a  set  of  measures  to  help  innovative  SMEs  by  improving  access  to 
finance, in particular at their early stages, at both EU and Member State levels. Making cross-
border  investments  in  venture  capital  easier  was  one  of  the  key  goals,  and  the  Commission 
called for steps to overcome the regulatory and tax barriers. 

To  monitor  the  development  of  risk  capital  financing  and  innovation,  the  Economic  and 
Financial  Affairs  Council  of  October  2006  invited  the  Member  States  to  report  on  their 
national environments within National Reform Programmes and requested the Commission 
to study further the conditions for early stage venture capital investments. 

Moreover,  the  Competitiveness  Council  of  December  2006  invited,  inter  alia,  the 
Commission to report on obstacles to cross-border investments by venture capital funds. 

In preparing this Communication, the Commission has consulted both the Member States and 
market  participants.  The  annexed  expert  group  report  from  March  2007  on  “Removing 
obstacles  to  cross-border  investments  by  venture  capital  funds”  analyses  the  barriers  and 
outlines solutions for venture capital funds investing across borders in Europe. 

1 A glossary is in the Annex. 
2 COM(2006) 349, 29.6.2006 

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2. 

THE ROLE OF VENTURE CAPITAL FOR INNOVATIVE SMES  

2.1. 

Economic potential of venture capital 

Despite the positive impact innovative SMEs have on  European  competitiveness,  they face 
significant  problems  in  accessing  finance  necessary  to  start,  grow  and  compete  on  global 
markets.  Improved  access  to  venture-backed  investments  would  help  them  exploit 
technologies and compete globally. 

While innovative SMEs are a relatively small proportion of SMEs, they have the potential to 
yield  high  benefits  in  creating  new  jobs  and  technologies.  Accordingly,  there  are  studies 
showing  that  venture  capital  contributes  significantly  to  job  creation.  A  recent  study3 
reported  that  companies  in  the  EU  receiving  private  equity  and  venture  capital  created  one 
million new jobs 2000-2004; over 60% of these jobs were created by venture capital backed 
companies and employment in these companies grew by 30% per annum. 

In addition, innovative and growth-oriented firms backed by venture capital spend on average 
45% of their total expenses on R&D. This amounts to an average €3.4 million per company 
yearly or €50 500 per employee, which is si x times higher than in the EU-25 top 500 R&D 
spenders4. 

Econometric studies have also described a positive relation with economic growth. A recent 
analysis4  estimated  that  an  increase  in  investments  at  the  venture  capital  stage  by  0.1%  of 
GDP contributes up to one percentage point increase in real economic growth.  

Moreover, venture capital  is  being increasingly important for environmental sustainability 
(€1.25  billion  was  raised  in  2006) 5.  Sustainable  venture  capital  funds  invest  in  the  range  of 
€1-5  million  with  focus  on  early-stage  and  typical  investments  in  renewable  energies  and 
clean technologies. 

2.2. 

Recent trends and challenges 

After  the  downturn  due  to  the  dotcom  bubble  bursting  in  2000,  European  venture  capital 
industry has shown an upward trend since 2004 and reached very high levels in 20066: of the 
total €112 billion of funds  raised, €17 billion went to venture  capital representing an increase 
by  60%  on  2005  levels.  Out  of  €71  bil lion  of  total  equity  capital  invested,  venture  capital 
investments amounted to €17.2 billion, an in crease of 36% over the previous year. 

Although the figures from 2006 showed a considerable growth in seed investment, the major 
share  of  venture  capital  investments  still  continues  to  go  to  expansion  capital.  The  main 
challenge  is  to  create  an  environment  where  seed  investments  can  be  kept  at  a  high  level 
despite the cyclical nature of venture capital. 

Another  challenge  is  that  the  growth  potential  is  limited  by  the  small  amount  of  venture 
investments per deal. The European average deal size for early-stage investment is just €0.4 
million against €2.2 million in the US. 

3 “Employment Contribution of PE and VC in Europe, EVCA Publication, October 2005 
4 “Venture Capital in Europe: Spice for European Economies” T. Meyer, Deutsche Bank Research, Oct. 2006  
5 “Venture Capital for Sustainability 2007”, Eurosif, 2007 
6 “Annual Survey of Pan-European Private Equity & Venture Capital Activity”, EVCA Yearbook 2007  

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In  addition,  although  investments  in  clean-tech  start-ups  are  increasing  in  Europe,  these 
investments in the US more than doubled in the past two years and are now four times higher 
than in the EU. The challenge for Europe is to generate profitable clean-tech investments to 
sustain their growth7. 

3. 

MARKET FRAGMENTATION LIMITING VENTURE CAPITAL DEVELOPMENT 

At present, the potential of EU venture capital markets is not fully exploited and markets do 
not provide sufficient capital to innovative SMEs at early growth stages. The lack of an equity 
investment culture, informational problems, fragmented market and high costs are among the 
main reasons for this market failure. 

The stage of development of venture capital markets varies. In larger Member States with 
more  mature  markets,  sector  funds  are  becoming  more  common;  these  funds  could  benefit 
from improved opportunities to invest across borders and raise money in the single market. In 
markets that are in the early stages of development, the catalytic role of country funds with 
public  investors  is  beneficial  to  market  growth.  Yet  in  smaller  or  emerging  venture  capital 
markets,  funds  have  difficulties  in  expanding,  growing,  specialising  and  reaching  a  critical 
mass of deals. 

Further,  divergent  national  policies  create  significant  market  fragmentation,  which  affects 
adversely  both  fundraising  and  investing  within  the  EU.  Venture  capital  funds  and  their 
managers are  authorised and regulated according to national requirements. Those  funds that 
would  otherwise  expand  their  portfolio  across  borders  are  hindered  due  to  operational  and 
regulatory obstacles. 

In a fragmented venture capital market with currently 27 different operating environments, 
fund  structuring  across  multiple  borders  becomes  increasingly  complex  and  smaller  funds 
tend to avoid operating outside their home jurisdictions.  

4. 

BETTER CONDITIONS FOR VENTURE CAPITAL 

4.1. 

Creating framework conditions 

As outlined in the Communication on a broad-based innovation strategy8, the deficiencies in 
the  framework  conditions  as  well  as  the  barriers  in  the  Internal  Market,  including  lack  of 
availability of venture capital market, are hampering capital mobility, depriving businesses of 
the necessary scale to fully capitalise on investments, and limit EU innovation capacity. 

Government  policies  can  create  incentives  for  the  venture  capital  industry  and  encourage 
investments  in  innovative  SMEs.  Public  co-funding  can  in  particular  help  to  address  the 
shortcomings in seed capital provision, reduce the equity gap and help to develop the venture 
capital  market,  whilst  acknowledging  the  differences  in  the  development  of  venture  capital 
markets in the Member States. 

7 A substantial part of the Community programme CIP is earmarked for support of eco-innovative SMEs. 
8 COM(2006) 502, 13.9.2006 

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Targeted horizontal state aid can also play a role in encouraging private investments. In the 
new Community framework for state aid for research and development and innovation,9 state 
aid  for  young  innovative  enterprises  allows  to  support  SMEs’  first  years  of  existence,  to 
overcome their initial cash shortages due to insufficient funding, and to facilitate their growth. 
And the new Guidelines on state aid to support risk capital investments in SMEs10 include a 
light assessment procedure with a number of elements, such as a higher investment threshold 
of  €1.5  million  per  SME  over  a  period  of  12  months;  below  this  ceiling  the  Commission 
accepts that a market failure is assumed to exist. 

Moreover,  a  key  aspect  of  any  venture  capital  investment  is  the  exit  strategy  –  the  point  at 
which  the  venture  capitalist  can  sell  its  shares  and  release  funds  for  new  opportunities. 
Venture  capital  thus  also  needs  more  liquid  exit  markets  in  the  EU,  in  particular  growth 
stock markets that provide liquidity and can achieve a critical mass of advisory services.  

Although  venture  capital  is  in  many  ways  a  local  business,  relying  on  close  connections 
between  funds  and  entrepreneurs,  it  is  also  a  global  one  that  competes  for  both  funds  and 
investment opportunities. Venture capital thrives around clusters and universities that produce 
new  ideas  and  entrepreneurs.  The  European  innovation  policy  pays  special  attention  to 
supporting clusters and their cooperation that can also help the venture capital industry and 
its long-term sustainability by providing deal flow. 

4.2. 

Community policies to support financing of innovation 

The following Community programmes focus on the renewed Lisbon Strategy for Growth and 
Jobs priorities to support innovation and entrepreneurship: 

The  Seventh  Framework  Programme  (FP7)  aims  to  boost  the  funding  of  collaborative 
research in Europe in the period 2007-2013 with more than €53 billion, of which €1.3 billion 
is for innovative actions to outsource SMEs’ R&D. Additional €0.4 billion of public funding 
should be made available in 2008-2013 for the Eurostars Joint Programme supporting SMEs 
performing R&D. 

Linking  innovation  with  commercialisation  and  building  on  the  previous  experience,  in  the 
Competitiveness  and  Innovation  Programme  (CIP),  €1.1  billion  he lps  to  improve  SMEs’ 
access  to  finance  in  the  period  2007-2013.  The  new  High  Growth  and  Innovative  SME 
Facility was introduced to increase equity for innovative SMEs by investing on market terms 
into venture capital funds focused on SMEs in the early- and expansion phase. 

Complementary  instruments  are  available  within  JEREMIE  (Joint  European  Resources  for 
Micro  to  Medium  Enterprises),  a  joint  initiative  of  the  Commission  and  the  European 
Investment  Fund  to  tackle  the  risk  capital  for  SMEs  in  some  regions.  It  will  enable  the 
Member  States,  if  they  choose  it,  to  use  part  of  their  structural  funds  to  develop  different 
forms  of  risk  capital  and  financial  instruments  specifically  designed  to  support  SMEs.

9 OJ C 323, 30.12.2006, p. 1-26 
10 OJ C 194, 18.8.2006, p. 2-22 

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Coherent  policy  and  good  practices  are  important  in  developing  venture  capital  markets  at 
both the EU and national level. The Commission will promote exchange of good practices at 
all levels, from national down to the regional level and specific industry sectors, in particular 
by supporting platforms and innovation networks.  

5. 

A STRATEGY FOR IMPROVING THE CROSS-BORDER CONDITIONS  

Policies  that  directly  support  the  financing  of  innovation  will,  however,  not  be  sufficient  to 
reach  the  critical  mass  and  meet  the  challenges  of  a  global  economy.  Public-private 
partnerships  and  public  incentives  can  contribute  to  overcome  the  equity  gap,  but  only 
increased  investment  by  private  investors  can  provide  a  long-term  solution.  For  this,  the 
Commission  and  the  Member  States  have  to  act  to  improve  the  framework  conditions  for 
venture capital funds, of which cross-border operations are one.  

5.1. 

The role of free movement of capital 

The  free  movement  of  capital  is  a  fundamental  Treaty  freedom  and  the  main  vehicle  for 
financial  integration.  An  integrated  financial  market  brings  benefits  to  the  European 
economy  through  an  efficient  allocation  of  capital  that  increases  long-run  economic 
performance. A well-functioning venture capital market is an important part of the financial 
market, especially for reaching the goal of more innovative and competitive Europe.  

This is why it should be ensured that venture capital markets and funds operating on a cross-
border basis are made fully aware of the freedom of capital movement that is monitored and 
enforced by the European Commission. 

5.2. 

Improving conditions for fundraising  

Venture  capital  market  provides  institutional  investors,  such  as  banks,  pension  funds  and 
insurance  companies,  with  an  opportunity  for  portfolio  diversification  and  the  choice  of 
different  risk  return  profiles.  In  some  Member  States,  pension  funds  are  not  permitted  to 
invest in venture capital funds or face quantitative and geographic restrictions. Wherever this 
is the case, a possible source of capital is absent from the venture capital market. The national 
implementation of Directive 2003/41/EC11 should allow occupational pension funds in the EU 
to  make  a  professional  decision  on  their  exposure  to  venture  capital  based  on  the  ‘prudent 
person rule’. Member States are invited to extend the use of the ‘prudent person rule’ also to 
other types of pension funds and institutional investors.  

Another  obstacle  hindering  cross-border  business  is  the  lack  of  a  European  private 
placement regime. This results in higher organisational costs of raising money (in particular 
legal  and  advisory  fees,  which  are  paid  for  by  investors).  This  has  a  negative  impact  on 
returns and on the attractiveness of raising funds. Private placement is a specific method for 
selling  investment  products  directly  to  institutional  investors.  National  private  placement 
regimes seek to reduce many of the restrictions that are imposed in the event of marketing a 
fund to the wider public, as would be the case with a stock market listing. Current national 
regimes differ substantially and a common private placement regime could allow managers to 

11 OJ L 235, 23.9.2003 

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deal directly with knowledgeable investors across the EU and expand their business without 
giving rise to retail investor protection concerns.  

The MiFID12 introduces provisions to facilitate cross border transactions involving interests in 
venture capital funds, between seasoned professionals. There may be more that can be done to 
facilitate cross border private equity transactions between fund managers, intermediaries and 
sophisticated investors.  

The  Commission  is  analysing  national  frameworks  for  non-harmonised  funds,  including 
venture  capital  funds,  and  barriers  to  cross  border  private  placement  and  will  report  on  the 
possibilities for establishing a European private placement regime in the first half of 2008. 

5.3. 

Improving the regulatory framework  

A  better  regulatory  framework  would  contribute  to  lower  operational  costs  and  risk,  higher 
returns, increased flow of venture capital and more efficient venture capital markets. This 
would be advantageous for all Member States since risk capital could find the most deserving 
entrepreneurs and companies with the highest growth and development potential.  

Removing  administrative  obstacles  for  cross-border  investments  would  make  it  easier  even 
for  smaller  funds  –  and  funds  in  smaller  countries  –  to  operate  over  a  wider  geographical 
area,  increase  their  efficiency,  reach  economies  of  scale,  improve  returns,  specialise  and 
diversify their portfolios. 

For  each  Member  State  it  is  essential  to  have  in  place  arrangements  to  facilitate  the 
establishment of, and investment by, a venture capital fund. The Commission recognises the 
importance  of  such  solutions  and  regulations  along  national  lines.  The  authorities  should 
locally  assess  all  possible  supply  and  demand  factors  contributing  to  the  equity  gap  and 
identify the necessary legal measures for improvement.  

Member States are invited to review their legislation, by taking into account the possibilities 
of cross-border venture capital investments along with local investments. 

In  Member  States  without  formal  provisions  for  venture  capital  structures,  any  new 
regulation should enable cross-border operations.  

5.4. 

Reducing tax obstacles 

In addition to regulatory questions, tax issues are of paramount importance. In order to ensure 
that  cross-border  venture  capital  investment  is  not  hindered,  fund  structures  should  have 
features that can accommodate the individual legal and fiscal needs of investors.  

Currently, funds  can be established across the EU under  a variety of legal forms,  regimes, 
and structures, the interaction of which can lead to unrelieved double taxation. Member States 
can be broadly divided into three categories:  

12 Directive 2004/39/EC; OJ 2004/L 145/01, 30.4.2004 

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(i)  Member  States  with  a  developed  venture  capital  market  provide  specific  structures  to 
accommodate national and foreign venture capital investors on a transparent13 or tax exempt 
basis, such as limited partnerships.  

(ii) Member States with specific venture capital structures, including some structures that are 
tax exempt (fiscally transparent). However, these structures are too complex and/or restrictive 
and are therefore not used in practice. 

(iii)  Member  States  without  any  specific  rules  or  regulation  and  with  no  suitable  structure; 
investments are only possible by using an off-shore or intermediary investment vehicle or an 
existing  corporate  structure  (limited  liability  companies,  limited  partnership  company, 
qualified  investment  company,  as  well  as  kind  of  closed-end  structures  for  collective 
investments, joint-stock company, local corporate structures or parallel investment structures). 

A  comprehensive  consultation14  with  the  industry  and  the  Member  States  has  revealed  that 
venture capital structures currently available in Europe are not able to accommodate all types 
of foreign investors from within and outside the EU.  

Therefore,  complex  fund  structures  with  parallel  vehicles  have  to  be  set  up,  in  order  to 
minimise  the  tax  disadvantages  from  investing  cross-border.  The  high  transaction  costs  of 
setting  up  the  structure15  and  of  its  on-going  management,  together  with  the  existing  legal 
uncertainty, further dissuade venture capital funds from cross-border investment. 

The  Nordic  Innovation  Centre16  has  proposed  some  solutions  to  improve  the  conditions  for 
the  Nordic  venture  capital  market:  funds  established  as  limited  partnerships  should  be  tax 
transparent; no VAT should be imposed on the management company of the fund and foreign 
funds should not be taxed. Such an approach could bring competitive advantages and would 
strengthen the region within the European venture capital market. 

The  Commission  has  already  taken  various  initiatives  in  the  direct  tax  field  with  a  view  to 
improving  the  functioning  of  the  Internal  Market.  As  the  Commission  has  previously 
suggested  about  the  implementation  of  the  Risk  Capital  Action  Plan17,  there  is  scope  for 
further  improving  national  regulatory  frameworks  and  eliminating  economic  and  juridical 
double taxation on cross-border venture capital operations.  

The  Commission  has  set  up  an  expert  group  with  governmental  and  private  experts  from 
Member States to identify cases of double taxation and other direct tax obstacles to cross-
border venture capital investments in the EU and to reflect on and discuss technical solutions 
to overcome these. This expert group shall report by end of 2008. 

5.5. 

Progressing with mutual recognition  

The Commission believes that in order to remove the barriers to venture capital cross-border 
fundraising  and  investing  and  to  ensure  the  benefits  of  the  Internal  Market,  venture  capital 

13 Tax transparency means that income and capital gains is not in principle liable to taxation at the fund level in 

the country where the fund is established. 

14 See the annexed Expert group report, March 2007 
15 Up to 1% of total fees as a percentage of a Limited Partner’s commitments over the 10-year life of a fund.  
16 “Obstacles to Nordic Venture Capital Funds”, Nordic Innovation Centre, September 2007. 
17 COM(2003) 654, 4.11.2003 

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structures that are functioning well in some Member States, together with those structures that 
are  appropriate  for  non-domestic  investors,  could  be  adopted  and  recognised  elsewhere. 
Efforts  would  in  practice  include  some  regulatory  changes  and  their  implementation  would 
require commitment at both national and industry level. 

Optimally,  a  single  venture  capital  fund  structure  could  be  established  to  provide  the  same 
conditions  for  every  fund’s  investors  throughout  the  EU.  This  solution  would  not  preclude 
national  structures  being  used  for  national  and  locally  established  funds.  However,  such  an 
outcome  does  not  seem  possible  in  the  short-term  due  to  the  complexities  arising  from  the 
divergent fiscal treatment of investors located in different jurisdictions. 

Given  the  complexity  of  the  issues  at  stake,  involving  legal  and  taxation  regulation  in  the 
Member  States,  the  Commission  advocates  increased  efforts  to  work  towards  a  common 
understanding of the key features of venture capital funds and their investors. On this basis, 
the mutual recognition of the existing national frameworks would be a way forward. In a 
fragmented venture capital market, this is the most pragmatic approach in the short-term.  

To  achieve  a  sustainable  and  efficient  venture  capital  market,  the  Member  States,  when 
reviewing  the  existing  or  adopting  new  legislation  are  invited  to  recognise  the  following 
features18 constituting good practice: 

•  Mutual recognition of venture capital funds: a venture capital fund could be established 
only  in  its  home  jurisdiction  and  recognised  in  other  Member  State  as  equivalent  to 
domestic  venture  capital  funds  and  not  be  liable  for  separate  establishment  in  each 
jurisdiction. National authorities could recognise that funds domiciled in another Member 
State and operating in their market are already subject to the regulatory regime in the home 
country. 

•  If  the  fund  manager,  subject  to  a  regulatory  regime  in  its  home  country,  could  also 
operate directly in the investee country without being ‘established’ there, operational costs 
and time needed would be reduced. 

The  Commission  acknowledges  that  the  proposed  solution  implies  mutually  acceptable 
levels of supervision and transparency. On this basis, national competent authorities could 
recognise that venture capital funds from other Member States are subject to similar regimes, 
and  ensure  cooperation  and  comparability  of  supervision  within  existing  structures  of 
cooperation.  

For  venture  capital  funds  and  management  companies,  adherence  in  spirit  and  substance  to 
world-class  industry  standards  is  highly  recommended.  As  with  other  contracts,  firms 
receiving  investment  can  use  recourse  to  applicable  legislation  in  cases  of  dispute.

18 See the annexed Expert group report, March 2007. 

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6. 

CONCLUSIONS 

6.1. 

Next steps and recommendations  

To improve fundraising and investing across-borders, the Commission will: 

- Analyse national approaches and barriers to cross border private placement. A report on 
the possibilities for establishing a European private placement regime will be issued in the 
first half of 2008. 

-  Identify,  together  with  experts  from  the  Member  States,  cases  of  double  taxation  and 
other  direct  tax  obstacles  to  cross-border  venture  capital  investments;  the  expert  group 
shall report by the end of 2008.  

-  Based  on  these  reports,  the  Commission  will  analyse  the  possibilities  of  defining 
common  features  in  order  to  move  towards  an  EU-wide  framework  for  venture  capital. 
The  Commission  will  also  study  possible  ways  of  assisting  the  Member  States  in  the 
process of mutual recognition. 

In  order  to  reduce  market  fragmentation  and  improve  conditions  to  venture  capital 
fundraising and investing, the Commission invites the Member States to: 

-  Where  it  is  not  yet  the  case,  extend  the  ‘prudent  person  rule’  to  other  types  of 
institutional investors, including pension funds.  

-  Create  a  common  understanding  of  the  features  of  venture  capital  funds  and  qualified 
investors and consider a mutual recognition of the national frameworks. 

- Overcome regulatory and tax obstacles by reviewing existing legislation or by adopting 
new  laws.  The  aim  is  to  give  all  venture  capital  funds  the  opportunity  to  specialise  and 
diversify,  including  smaller  specialist  funds.  For  this  reason,  the  goal  is  for  funds  and 
management  companies  to  invest  across  borders  under  the  same  conditions  as 
domestically. This implies the absence of a separate registration. 

- Enable cooperation and mutually acceptable levels of supervision and transparency. 

- Encourage development of competitive clusters and promote liquid exit markets. 

6.2. 

A partnership approach 

Close cooperation between the Member States, the European Commission and the industry is 
essential  to  implement  these  recommendations  and  to  progress  towards  a  European  venture 
capital market.  

The Commission will further monitor the development of risk capital markets as reported in 
the National Reform Programmes.  

The  Commission  will  continue  to  work  towards  a  more  unified  venture  capital  market  that 
contributes to improved access to finance for innovative SMEs and will report again on these 
issues in 2009. 

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