Commission explores EU-wide crowdfunding project to finance recovery

European Commission executive vice-president for Economy, Valdis Dombrovskis, will take over the Trade portfolio, while it will pass Financial Services to Mariead McGuinness. [EFE/EPA/STEPHANIE LECOCQ / POOL]

The European Commission has held initial talks with various platforms involved in crowdfunding and proposed to lead a joint EU-wide crowdfunding campaign to help some of the most affected groups by the coronavirus pandemic, according to an internal document seen by EURACTIV.com.

The Commission’s internal memo, dated 7 April, proposed “a joint action among existing crowdfunding platforms” to support the most vulnerable citizens, small businesses and self-employed workers affected by the lockdown.

The EU executive would lead and coordinate the campaign across the bloc including those member states without crowdfunding platforms. 

“It would launch a strong signal of solidarity not only at a national and local level but also EU solidarity to affected populations across member states,” the note reads.

The document explains that the idea is “being informally discussed with the industry”, including a “very positive” preliminary contact with the European Crowdfunding Network, who will follow up with its members.

The crowdfunding campaign would raise funds from citizens, companies, organisations and philanthropists to contribute alongside the public sector to fight the crisis.

It would not be the first innovative pledging effort the Commission would lead during the coronavirus pandemic. 

On 4 May, the EU executive is launching a worldwide pledging marathon, with other partners, to finance the development of a vaccine against the COVID-19.

The initiative wants to raise around €7.5 billion from countries, organisations and companies.

The proposal was part of a document listing urgent actions to mobilise various actors during the COVID-19 crisis, in particular the financial sector.

Among other ideas, the document also proposed an “EU Code of Responsible Conduct” for the financial sector to support European citizens and businesses in this crisis, which could include individual pledges by banks and other financial actors.

Commission officials described the document as part of “internal brainstorming” but added that some of the ideas could be part of a new banking package.

The banking package, put forward on Tuesday (28 April), will unleash more capital available for loans to companies and households by easing the banking rules. It could unlock around €30 billion in additional loans, which could mobilise extra €450 billion of capital, according to Commission officials.

Leak: Capitals call for 'ambitious' use of bank regulation to help with coronavirus

EU governments want the European Commission and regulators to take an “ambitious” approach when interpreting the flexibility of banking rules in the coronavirus period, to ensure that money flows to the real economy, according to a draft statement seen by EURACTIV.com.

“We are using the full flexibility of the EU’s banking rules and proposing targeted legislative changes to enable banks to keep the liquidity taps turned on so that households and companies can get the financing they need,” the Commission vice-president in charge of financial services, Valdis Dombrovskis, said on Tuesday.

A communication included in the banking package said the EU executive “will further engage with the European financial sector on its role in the fight against the coronavirus and its socio-economic impacts, and the support of a sustainable economic recovery.”

Dombrovskis highlighted some best practices implemented by the financial sector so far, such as the deferral of loan payments, already mentioned in the memo dated on 7 April.

He added that he was open to considering more solutions, given that not every member state is adopting some of these practices to make available more capital.

“We need to find solutions for concrete problems. And we need to do it quickly,” Dombrovskis stressed.

[Edited by Zoran Radosavljevic]

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