[Check Against Delivery]
Vice President from the European Commission rate responsible for Competition Policy
Adoption associated with risk financial guidelines
Brussels, 15 January 2014
Today the particular Commission offers adopted brand new guidelines upon state support to help companies use of finance over the EU.
In European countries, the majority of firms, and in particular SMEs, are heavily dependent on standard bank lending.
The financial crisis has substantially reduced access to credit plus exacerbated the down sides SMEs have traditionally came across in obtaining funding on the market.
Approximately 1 / 3rd of Western SMEs happen to be unable to have the capital they will needed to start and build their activities.
Therefore , actions that assist firms using a high growth potential to accessibility finance can produce a real variation for the EUROPEAN UNION economy, each time when The european countries needs to improve economic development, encourage development and enhance job development.
State aid, by giving the right incentives to cope with this market disappointment, can help put this money gap. I could even declare such steps are probably the very best example of what I call great state help.
The current state aid platform for danger capital has proven to be as well restrictive with regards to forms of loans, aid tools and funding structures.
Furthermore this construction only covered companies within the earliest progress phase. Firms other than SMEs – frankly, firms along with less than two hundred and fifty employees – were not entitled.
The new recommendations intend to address these shortcomings.
On the one hand, the problems of companies are not restricted to obtaining collateral. They also lengthen to many additional financial tools which are essential for companies to start upwards and grow.
However, SMEs are certainly not the only firms that encounter problems within access to financial. So do many organisations with method capitalisation — the alleged mid-caps.
For that reason our fresh framework is going to set up a straightforward, flexible plus more effective express aid rules for the provision of risk finance to those SMEs in addition to midcaps.
Let me explain briefly the main changes.
The particular scope of the guidelines has been enlarged, offering for condition aid to midcaps rather than only SMEs. This includes not only small midcaps (of less than 500 employees) but also large innovative midcaps (companies of up to 1500 workers having considerable Ramp; D and innovation costs).
Moreover, the guidelines is going to be complemented with a revised common block permission regulation (GBER), on which we now have recently created a public discussion. Under the offer, to be adopted in a few a few months, a wider range of assistance measures is going to be exempted from your obligation regarding prior warning announcement to the Percentage. Risk financial measures up to 15 , 000, 000 euros each company will now benefit from this kind of exemption.
This will allow Fellow member States to back up SMEs access to finance together with limited management burden, and will facilitate typically the absorption associated with EU money in cases where aid measures are usually co-funded by structural funds.
Above 15 million pounds, the Commission rate will measure the compatibility of the measure to ensure it does not produce an undue distortion regarding competition, yet without impacting any particular cap, as long as the help measure is justified plus responds for an identified industry failure.
Secondly, the new risk finance rules will better reflect marketplace practices. Financial intermediaries and investment cash involved should be able to provide companies with the amount and type of financing that is appropriate for their development period and the industry in which they operate. This includes the possibility in order to freely blend equity, quasi-equity, loans plus guarantee devices.
Thirdly, typically the minimum contribution of private traders will now become tailored to typically the riskiness plus the development period of the company.
Of course , exclusive participation together with public buyers ensures that aid measures in order to attract instead of replace private funding.
However , lowest private investor participation will range among 10% and 60%. This will allow higher general public support in order to company design, where the exclusive business financial markets will be the most unwilling to provide the required financing.
Fellow member States will be able to provide as much as 90% of the investment in seed and start-up firms before their own first industrial sale – that is to say, businesses which are generally not as likely to attract personal financing through market gamers such as banking institutions.
The guidelines consist of new conditions on open public support to be able to alternative programs that industry in SME shares, in order to facilitate typically the setting up regarding funding stations alternative to what banks can lend.
And lastly, they also simplify the conditions with regard to tax offers granted in order to corporate traders that invest into SMEs.
To amount things up, the new state support framework may encourage Associate States to provide risk financial through successful and classy state help measures.
This initiative complements one other initiatives launched at EU level which often contribute to aiding access to finance, such as Horizon 2020 or even COSME, the particular EU plan for the competitiveness of businesses and SMEs.
By providing offers to exclusive investors to take a position more in to SMEs in addition to midcaps, we can help bridge the funding gap that hampers the introduction of our firms from the start-up stage onwards. This, in turn, will boost economic development and career creation.