Extracts from the press conference by Joaquín Almunia, on the Risk Finance Guidelines
Type: Summary of press conference
Brussels - EC/Berlaymont
On 15 January 2014, Joaquín Almunia, Vice-President of the EC in charge of Competition, held a press conference on the new guidelines adopted by the EC setting out the conditions under which Member States can grant aid to facilitate access to finance by European SMEs and companies with a medium capitalization (the so-called "midcaps").
Certain SMEs and midcaps, in particular innovative and growth-oriented SMEs in their early development stages, have difficulties to get funding, independently of the quality of their business potential. State aid can help address this funding gap, not by replacing existing funding channels but by attracting fresh money into new ventures through well-designed financial instruments and fiscal measures.
These guidelines are part of the Commission's State Aid Modernisation (SAM) strategy, which aims at fostering growth in the Single Market by encouraging more effective aid measures and focusing the Commission’s scrutiny on cases with the biggest impact on competition. The guidelines will enter into force on 1 July 2014.
Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
||Exterior view of the European Commission Berlaymont building
||Joaquín Almunia, Vice-President of the EC in charge of Competition, arriving in the press room
||SOUNDBITE by Joaquín Almunia (in ENGLISH): the Commission has adopted new guidelines on State aid to facilitate companies' access to finance across the EU; in Europe, the majority of companies, and in particular SMEs, are heavily dependent on traditional bank lending; the financial crisis has significantly reduced access to credit and exacerbated the difficulties SMEs have traditionally encountered in obtaining funding in the market; approximately one third of European SMEs have been unable to obtain the capital they needed to start and develop their activities.
||Cutaway of a photographer
||SOUNDBITE by Joaquín Almunia (in ENGLISH): the current State aid framework for risk capital has proven to be too restrictive in terms of forms of financing, aid instruments and funding structures; moreover this framework, adopted in 2006, only covered companies in the earliest growth phase; companies other than SMEs - that is to say, firms with less than 250 employees - were not eligible.
||Cutaway of journalists
||SOUNDBITE by Joaquín Almunia (in ENGLISH): the new guidelines intend to address these shortcomings; on the one hand, the problems of companies are not limited to obtaining equity; they also extend to many other financial instruments which are vital for companies to start up and flourish; on the other hand, SMEs are not the only companies that face problems in access to finance; so do many companies with medium capitalisation - the so-called "mid-caps"; therefore, our new framework aims to set up a simple, flexible and more effective State aid rules for the provision of risk finance to these SMEs and midcaps.
||Cutaway of journalists
||SOUNDBITE by Joaquín Almunia (in ENGLISH): the scope of the guidelines is being enlarged, providing for State 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 employees having significant R&D and innovation costs).
||Joaquín Almunia leaving the press room