EU needs to promote venture capital for SMEs
8 March 1999 - 8 March 1999
To promote venture capital for SMEs (small and medium-sized enterprises), the European Union (EU) needs a more positive attitude to risk investment by, for example, encouraging tax breaks backed up with state guarantees, advice and support schemes and partnership agreements between large and small firms, according to a draft resolution, submitted by MEP Giorgos Katiforis (Gr, PES) to the European Parliament session in Strasbourg next week.
The Economic and Monetary Committee, while welcoming a European Commission initiative, notes that the EU is somewhere behind the USA in this area, but sees the establishment of a single currency as a positive factor for the risk capital market, according to the draft resolution.
The European Council identified improving access to the risk capital market for small firms as a key means of encouraging job creation. In its response, presented to EU ministers at the Cardiff June 1998 Summit, the Commission singled out high-tech industries, such as computing, telecommunications and biotechnology, as important sectors in need of substantial investment for the potential of SMEs to be realised. The Commission is therefore putting forward an action plan for risk capital as the first step towards a pan-European risk capital market.
The Committee identifies over-regulation and tax differences as barriers to investment. It takes the view that the Commission's action plan should concentrate on promoting a more positive attitude to risk investment in Europe, by, for example, encouraging tax breaks backed up with state guarantees, advice and support schemes and partnership agreements between large and small firms. Electronic trading by SMEs should also be encouraged. On the savings side, tax incentives and legal protection should also be offered to investors and the stock market for SMEs (EASDAQ) promoted along with the European bond market for the sector.
The Economic and Monetary Committee, while welcoming a European Commission initiative, notes that the EU is somewhere behind the USA in this area, but sees the establishment of a single currency as a positive factor for the risk capital market, according to the draft resolution.
The European Council identified improving access to the risk capital market for small firms as a key means of encouraging job creation. In its response, presented to EU ministers at the Cardiff June 1998 Summit, the Commission singled out high-tech industries, such as computing, telecommunications and biotechnology, as important sectors in need of substantial investment for the potential of SMEs to be realised. The Commission is therefore putting forward an action plan for risk capital as the first step towards a pan-European risk capital market.
The Committee identifies over-regulation and tax differences as barriers to investment. It takes the view that the Commission's action plan should concentrate on promoting a more positive attitude to risk investment in Europe, by, for example, encouraging tax breaks backed up with state guarantees, advice and support schemes and partnership agreements between large and small firms. Electronic trading by SMEs should also be encouraged. On the savings side, tax incentives and legal protection should also be offered to investors and the stock market for SMEs (EASDAQ) promoted along with the European bond market for the sector.