Brussels, 25/06/2013 (Agence Europe) - On Friday 28 June, the European Summit will agree on a new investment plan to encourage the financing of small businesses.
In the draft conclusions document for the summit that this newsletter has seen, the EU27 say that it is crucial to restore normal lending conditions for the economy because small businesses face hugely different interest rates within the same monetary area. They want the European Investment Bank (EIB) to be able to play a greater role by means of the following: - the EIB is invited to increase lending in the EU27 by 50% in 2013-2015 because the EU has identified new financing opportunities for more than €150 billion in areas like innovation, resource efficiency and instruments of strategic importance; - the financial risk-sharing instruments for lending (shared by the European Commission and the EIB) will be extended to create a leverage effect on the money markets (the summit will give details in July for these risk-sharing tools, which should be available from January 2014); - the mandate of the European investment fund (EIF) will be extended, as will the mandate of the financing system for small businesses' commercial operations; - the EIB will help tackle youth unemployment, the other major theme of the June summit; and - cooperation will be stepped up between the EIB and public investment banks.
The European Union budget for 2014-2020, to be discussed on the fringes of the summit (see related article), will act as a catalyst for financing activities conductive to growth and jobs. All sector-specific EU programmes will have to be finalised by the end of the year so that they can begin in January. The creation of “project bonds” to finance infrastructure will be speeded up.
On Monday, EIB Vice-President Philippe de Fontaine Vive told French business newspaper Les Echos that member states must ensure that the EU budget is used more as a financial lever rather than for subsidies, and this is a little revolution in itself. At the summit session devoted to financing the real economy, the head of the EIB, Werner Hoyer, will report on the various initiatives available. After the Eurogroup meeting on Monday 20 June, Euro Commissioner Olli Rehn talked of €1 billion being available to encourage small business financing. (MB/transl.fl)