Regional Policy Financial instruments for SME support under ESI funds 2014-2020 Conference "Linking entrepreneurship and science and financing from the EU budget" European Parliament, Brussels, 8 December 2015 Dr Joerg Lackenbauer, DG Regional and Urban Policy European Commission
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Regional Policy
Financial instruments for SME support under ESI funds 2014-2020
Conference "Linking entrepreneurship and science and financing from the EU budget"
European Parliament, Brussels, 8 December 2015
Dr Joerg Lackenbauer, DG Regional and Urban Policy
European Commission
Regional Policy
Strategic framework
SME support and the promotion of SME competitiveness is a key priority for the European Regional Development Fund (ERDF)
The simple expansion of production capacity, mergers with other firms, transfer of ownership or simple increase of the staff number do not per se increase competitiveness and are thus no priority for ERDF support
Scope of support: primarily, the ERDF supports the development of endogenous potential for SME competitiveness; it allows for productive investments, fixed investment in infrastructure, support for enterprises, networking, cooperation and technical assistance
Support under thematic objective 3 should contribute to enhancing the competitiveness of SMEs, i.e. aid has to focus on enterprises, and the result indicators also have to relate directly to the impact on these enterprises
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Regional Policy
Investment priorities
• (a) promoting entrepreneurship, in particular by facilitating the economic exploitation of new ideas and fostering the creation of new firms, including through business incubators
• (b) developing and implementing new business models for SMEs, in particular with regard to internationalisation;
• (c) supporting the creation and the extension of advanced capacities for product and service development;
• (d) supporting the capacity of SMEs to grow in regional, national and international markets, and to engage in innovation processes;
• in its essence, ESIF-based SME support (both through grants and
financial instruments) is about stimulating entrepreneurship (= new companies) and new growth in existing companies through innovation and internationalisation!
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Regional Policy
Investment priorities
• Ideally SME support measures under ESIF should address the key bottlenecks to growth of SMEs (within the thematic objective and in combination with measures under other TOs and/or funded outside the ERDF):
• 1. Access to customers and (international) markets
• 2. Access to Finance/Credit
• 3. Innovating products and services, technology transfer
• 4. Access to business intelligence and support services
At the end of 2014, EUR 9.4 billion of Structural Funds from the 2007-13 period were paid to financial instruments for enterprise (mainly SME) support
Apart from this, 2007-13 financial instruments were devoted to energy efficiency and urban development
Their use is much wider in 2014-20, but SME support remains a core area for ESIF financial instruments
As of now, EUR 10.3 billion are planned to be used for financial instruments for SME support ("TO3") across the EU (but likely to change!)
However, FIs-based support under many other thematic objectives will be spent in and for the benefit of SMEs as well, e.g. for RDI/TO1 (EUR 3.3 billion), EE/TO4 (EUR 3.8 billion) etc.
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Regional Policy
Financial Instruments for 2014-2020
Research, Development Innovation
Growth, Jobs and Social Cohesion
Infrastructure and energy
Horizon 2020 Equity and Risk Sharing Instruments
Financial instruments under European Structural
and Investment Funds
Contribution to EU level (central management); e.g. SME Initiative
National/regional instruments (shared management)
Off-the shelf FIs
Tailor made FIs
Competitiveness & SME (COSME)
Equity & guarantees
Connecting Europe Facility (CEF) Risk sharing instruments
MA can implement loans or guarantees directly (or through intermediate body) without formal set-up of a fund
MA can contribute programme allocations to EU level instrument (COSME, Horizon, "SME Initiative")
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Regional Policy
3. Continuity of principles and concepts of 2007-2013: Reuse of resources paid back
National co-financing at different times and levels
Combination of grants and FIs
4. Some changes to adapt to market practise and to reinforce flexibility:
• VAT eligibility
• Extended eligibility of management costs for some FIs
• Incentives on national co-financing
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Regional Policy
4. Some changes
to ensure sound design and implementation of financial instruments:
• Compulsory ex-ante assessment which must be carried out prior to decision to support financial instruments
• Payments in relation to FIs phased and subject to implementation on the ground
• Management costs and fees performance-oriented
• Comprehensive annual reporting by managing authority on each financial instrument
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Regional Policy
Financial instruments are not new: around 5% of 2007-13 Cohesion Policy allocations were implemented through financial instruments
The Investment Plan aims at an overall doubling of the use of financial instruments precisely because of their capacity to leverage additional funds and generate higher impact
First preliminary figures indicate that Member States intend to invest more than EUR 20 billion under their new Operational Programmes through financial instruments (loans, guarantees, equity…)
Other sources of finance for SMEs include ESIF-based grants for SME projects, the EFSI SME Window, and EU-centrally managed financial instruments such as H2020 and COSME