It may have been noticed that the countries of the European Union are currently locked in a prolonged squabble over budgets, with the aim of making Europe a dynamic and knowledge enabled economy being proposed to be achieved by funding massive road building plans in eastern Europe and spending the rest on agricultural subsidies.
The current president of the EU, the UK, has been trying to resolve the impasse, and suggesting that perhaps R&D rather than farm subsidies could have a greater impact on Europe’s future. It was intriguing to see the following paragraph in the UK’s latest proposals (click to download).
“The European Council invites the Commission in cooperation with the European
Investment Bank to examine the possibility of strengthening their support for Research
and Development by up to a maximum of â‚¬10 billion through a financing facility with
risk-sharing components to foster additional investment in European research and
development, particularly by the private sector.”
It is a nice idea, although not entirely new as the EIB has been trying to spend this money for quite a while, and there is no shortage of funds available, accessing it can be a problem, both in terms of a lack of suitable proposals being received, and the bureaucracy involved in getting a project underway.
So, any initiative which helps the European industry access EIB capital is a major step forward. Although the plan makes available another â‚¬10 billion, the real effect is more in the region of â‚¬20-50 billion as most EIB projects are only partly financed, say to 10-50% of the total cost, so the amount of capital actually mobilised can be two to ten times the EIB investment.