The EU has stepped up its investment in the venture capital industry and will make a €1 billion fund available by the end of 2012, European Investment Bank (EIB) Vice-President Matthias Kollatz-Ahnen told EURACTIV in an interview.
Kollatz-Ahnen said the EIB has mandated its long-term investment arm – the European Investment Fund (EIF) – to increase its relative stakes in venture capital funds to ensure that they are large enough to support the development of innovative new technologies.
The €1 billion fund, known as the Mezzanine Mandate for Growth (MFG), has already approved a number of deals and will be fully operational in around 18 months' time.
However, he stressed that the EIB and EIF are not in the business of "picking winning technologies," leaving that task to venture capital fund managers.
Kollatz-Ahnen dismissed concerns that large corporations are accounting for a growing proportion of the EIB's loan book and eclipsing the small business sector, which the Bank has promised to target.
He said the EIB had pledged to make €30 billion available to SMEs from 2008 to 2011 and was likely to overshoot this target.
The funds are channelled to small firms through commercial banks, but there have been reports that these monies are not getting through to the companies that need them most (EURACTIV 8/7/09).
Kollatz-Ahnen said the EIB relies on "intermediary banks" to identify suitable SME beneficiaries and disperse the funding accordingly. He said the amount of funding getting to small firms continues to increase and the EIB has taken action to encourage intermediaries to speed up lending.
The EIB vice-president said he is not concerned that EU funds could be offered as soft loans to companies who might otherwise not be deemed creditworthy. He said commercial banks evaluate applications for the EIB's SME loans in the same way as they assess any financial risk.
"These SME projects are evaluated by the financial intermediaries using normal commercial banking criteria. The EIB is not becoming involved in lending outside those normal criteria," Kollatz-Ahnen said.
Asked about the EIB's role in supporting Greece's ailing economy, he stressed that the Bank could not legally provide "pure budgetary support" but stands willing to help extend credit lines to companies and projects that are "in line with our objectives".
"The EIB cannot bail out member states. Our statute simply does not allow it. What we can do is finance viable projects or programmes in Greece or other countries. We continue to work with eligible Greek projects and financial intermediaries to ensure a continued supply of funding to the underlying Greek economy," Kollatz-Ahnen said.
Last year the EIB financed projects for €1.6 billion in Greece and is "ready to do more," he added.