EU will promote venture capital for SMEs
The European Parliament has approved, without debate, the resolution, submitted by MEP Giorgos Katiforis (Gr, PES), on combating unemployment by promoting venture capital for SMEs (small and medium-sized enterprises). MEP Katiforis said the European Union (EU) needed 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. The Economic and Monetary Committee, while welcoming a European Commission initiative, had noted that the EU is somewhere behind the USA in this area, but saw the establishment of a single currency as a positive factor for the risk capital market, according to the 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.