Local view for "http://purl.org/linkedpolitics/eu/plenary/2002-10-09-Speech-3-070"
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".
Mr President, we received the report by the European Parliament's Committee on Employment and Social Affairs on the third report on the growth and employment initiative with a great deal of interest. I especially appreciated the rapporteur's spirit of collaboration and his comments on our annual report and would point out that the Committee on Employment and Social Affairs found the European Commission's report to be detailed and that the Commission had responded to the European Parliament's request for the report to be presented earlier. And, of course we had excellent relations and worked closely with the rapporteur, as is clear from the position taken by Mr Bushill-Matthews.
Just one comment, Mr President, on the original approach taken by Mr Bushill-Matthews. Clearly the initiatives I referred to form part of the multiannual programme on small and medium-sized enterprises. The conclusion drawn from all the analyses and investigations is that one of the most serious problems faced by small and medium-sized enterprises is financing and that this is a real problem throughout the European Union. All these European Commission initiatives, the guarantee funds, the Joint European Venture, technological backing for companies, are pilot programmes to find new financial instruments for small and medium-sized enterprises, some of which are successful and some of which are not and all of which depend on how dynamic and well-developed the markets are in the Member States. But we believe that, in all cases, the outcome is positive because we work with the Member States, new instruments come on to the market and we always find the model to suit the country and the SME sector.
I shall reply by dividing my comments into three entities. First, the provision of information to Parliament and the relevant timetable, secondly geographical coverage and thirdly prospects and funding.
As far as the provision of information is concerned, although completing formal procedures is time-consuming, the European Commission has continued to apply its practice of updating the rapporteur at regular intervals before completing the official procedure. And, it has endeavoured to provide quarterly information on the financial application of the programmes managed by the European Investment Fund on an unofficial basis. In reply to your call in connection with so-called pre-start financing by financing intermediaries under the SME Guarantee Facility, I should point out that this pre-start financing is granted to certain small and medium-sized enterprises because they are in the start-up phase; they do not need to be officially recognised before the loan is granted and they are, of course, selected by the financing intermediaries.
As far as geographical and sectoral coverage is concerned, the European Investment Fund has managed to achieve relatively satisfactory coverage of all countries despite the recession on all the money markets. It has managed to commit all the available funds in thirteen Member States. The reason it is so hard to apply the European Technology Facility Start-Up Facility or ΕΤF Start-up Facility is because the facility itself has not got off to a uniform start in every country; there are various problems with its application which are due in part to the fact that national venture capital markets are at different stages of development and, of course, in part to the 50% contribution, which is not easy to find; countries with an underdeveloped venture capital market find it hard, if not impossible to meet this second criterion.
Similarly, we need to look at the overall geographical distribution of all SME funding mechanisms, rather than at each one separately. We also believe that we need to divide the budget between the various SME funding mechanisms within this framework with the right degree of flexibility, taking account of market demand rather than just responding to the need for geographical coverage. I should point out that the European Investment Fund has always endeavoured to channel funding to countries where there is little demand. As far as sectoral coverage is concerned, I should like to point out that the majority of small and medium-sized enterprises to have benefited from these funds belong to traditional sectors. Bearing this in mind, it is true to say that the Fund's start-up facility is targeted at high-tech small and medium-sized enterprises and that over 90% of the beneficiaries of the SME start-up facility are micro enterprises with fewer than 10 employees, mainly in the services, craft, manufacturing and commercial sectors.
Thirdly, prospects for financial instruments. The survival of programmes which benefit small and medium-sized enterprises is guaranteed under the multiannual programme on enterprise and entrepreneurship, which is now also open to candidate countries. The European Investment Fund hopes to start negotiating contracts before the end of 2002, by signing memoranda of understanding with these countries and completing financial procedures. As far as the European Technology Facility Start-Up Facility presented in the 2001 annual report is concerned, the revaluation of fast-growth innovative enterprises and the huge losses sustained by investors as a result have completely upset the market and there appears to be little likelihood of any change here in the future. We also need to bear in mind that, with slow economic growth, increased competition on the European markets, the restructuring of the banking sector and the demand for shareholder value, banks are unwilling to grant or renew loans to risky small and medium-sized enterprises. Of course, when part of the risk is underwritten by public-sector bodies, there is still a chance that banks will offer loans to small and medium-sized enterprises. Consequently, the market demand for the SME start-up facility is still fairly high and we believe that the candidate countries will generate additional demand once they join.
As far as the Joint European Venture or JEV is concerned, the Commission agrees with Mr Bushill-Matthews' remarks that the programme had a limited impact as far as job creation is concerned and was not cost effective. There was limited demand on the part of small and medium-sized enterprises and considerable delays in processing applications, due to the fact that the Commission had to apply strict procedures in order to minimise the risk of irregularity and protect the Community's economic interests. This being so, the Commission agrees with Parliament that the Joint European Venture should be shut down.
The final evaluation of the growth and employment initiative should be completed and be ready for submission to Parliament in November 2002. At the end of the consultation period, the Commission will submit a proposal to the Council in March or May 2003 for a Council decision amending the multiannual programme for enterprise and entrepreneurship and possibly shutting down the specific initiative on the Joint European Venture.
Finally, two words about evaluation: the period covering the budget allocated to the financial instruments managed by the European Investment Fund expired on 29 May 2002, that is, four years after the Council decision was issued. Consequently, the evaluation report was scheduled for submission after that date, so that account could be taken of the full 48-month budgetary period."@en1
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