Increasing the funding options
Foreword by Ramon Tremosa MEP, ALDE Coordinator at the Economic and Monetary Affairs Committee, European Parliament
The key to ensuring the EU economy thrives on a global level is by nurturing its innovative capacity at a local level. I am from Barcelona, and as a Mediterranean liberal I am very much aware of the need for developing financial markets in order to diversify the sources of credit for our most innovative small and medium-sized enterprises (SMEs) and to lessen their dependence on banks.
I am committed to ensuring the right environment exists in which companies can innovate. Europe offers start-ups a market with scale, but to ensure that we have the right ecosystem to make this happen, we need to offer our entrepreneurs something more – we need to offer them the right mix of financing throughout their company’s lifecycle.
I myself have fought for diversified funding opportunities for SMEs, especially through the availability of crowdfunding. In an age where banks are still not able to provide Europe’s high-growth companies with the capital they need, it is especially important that all funding opportunities are fully developed.
1000 Companies to Inspire Europe is relevant because it showcases the dynamism and diversity of the EU’s entrepreneurs and the different types of funding they need. It also serves as a helpful reminder of what the Capital Markets Union (CMU) project is all about.
LSEG’s ELITE programme, a scheme dedicated to educating start-ups about the many funding options that might be available to them, is an example of the CMU’s philosophy in practice.
More can be done to ensure the right environment exists for innovative SMEs. We need to facilitate capital flowing to where it is needed the most, including carefully calibrating the prudential standards for risk capital. This will ensure that the need for financial stability is balanced with freeing up capital, which can then be invested where wealth and jobs are created.
Another challenge to be addressed, and one the European Commission has rightly identified as a priority, is the need to remedy the current taxation bias towards debt over equity. This is needed to create the right incentives for investors. Another prerequisite for putting Europe back on the path to growth is the need for a global level playing field. This will help maintain the competitiveness of our region which, when it comes to our digital champions, is lagging significantly behind the US.
My group and I remain committed to further improving the conditions for SMEs, in order to allow them to reach their full potential by providing the right investment signals and appropriate regulatory framework for their continued development.