Pursuant to Council Decision 2000/819/EC, the Commission presents the final annual report on progress achieved in the implementation of financial instruments under MAP, the multiannual programme for enterprise and entrepreneurship, and in particular for small and medium-sized enterprises-SMEs. MAP was initially designed to cover the period 2001-2005. However, in order to ensure continuity of action until the start of the successor programme under the new Financial

Perspectives, MAP was extended by one year, to the end of 2006.

This report covers the four Community financial instruments ("measures") implemented under MAP, i.e.

SME Guarantee Facility; Start-up Scheme of the European Technology Facility (ETF Start-up Facility); Seed Capital Action; Joint European Venture (JEV) programme

It provides an overview of progress achieved as at 31.12.2006, and looks in detail at each financial instrument.

The report states that MAP financial instruments were, in budgetary terms, the most important element of the MAP programme. Total budget resources committed at the end of the programme for the financial instruments amounted to nearly EUR 520 million, of which only EUR 5 million allocated to the Seed Capital Action were not used. Overall, 74 operations were approved since mid-2002 until the end of 2006, for a total of EUR 467 million. Nearly 194,000 SMEs benefited from the MAP financial instruments, around 1% of all EU SMEs.

Broad geographical coverage was achieved with 29 countries covered (all EU Member States plus Turkey and Norway) out of 31 eligible countries.

The SME Guarantee Facility was very well taken up by the market. The Loan Guarantee and

Micro-credit windows were particularly successful, allowing participating Financial Intermediaries to increase volumes and to take on more risk. The SME Guarantee Facility closely followed market needs and was designed from the start to be easily and quickly adapted to each country’s specific market conditions. The total volumes supported by the SME Guarantee Facility were very high. For the approximately EUR 262 million of cap amounts signed, loans of nearly EUR 17 500 million were backed. Second only to the Structural Funds, which have significantly higher budgetary resources and a different focus, the SME Guarantee Facility is the most important EU programme in terms of number of final SME beneficiaries.

The implementation of the ETF Start-up Facility faced some difficulties in the beginning of the programme period, due to the difficult fundraising situation prevailing on the EU venture capital market. The improved economic situation in 2005 and 2006 led to a significant increase in demand for the Facility. As at 31.12.2006, the budgetary resources committed under ETF Start-up amounted to more than EUR 220 million, representing nearly 43 % of the budget for the MAP financial instruments. All funds available under ETF Start-up were used by the end of 2006.

The Seed Capital Action was less successful than anticipated due to its constraints in terms of eligibility criteria and to the difficult market conditions for seed capital.

The report notes that the take-up of the Joint European Venture (JEV) programme by the market was low, the job creation effect limited and the administrative cost very high. In April 2004, Parliament and Council adopted a decision to close the JEV.

An evaluation of EC Financial Assistance Schemes for SMEs indicated that the MAP financial instruments are effective and efficient. Their management by the European Investment Fund (EIF) was considered as a best practice for their proximity to the market. According to the evaluators, the instruments play a catalytic role in increasing the supply of finance to SMEs throughout the EU, including in those countries where national financial instruments are less developed.

A more recent external evaluation of the MAP reinforces the conclusions of the Financial Assistance Schemes evaluation. This evaluation concludes that the SME Guarantee and ETF Start-up Facilities have made a major contribution to improving the financial environment for business as instruments of a public policy supporting access to finance for SMEs. The evaluators consider that the financial instruments are efficiently implemented through the “chain” consisting of DG Enterprise—DG Economic and Financial Affairs—European Investment Fund (EIF). The report confirms that the “no one-size-fits-all” approach taken is appropriate: both the venture capital and guarantee instruments can be adapted to different and evolving market conditions. An ex-post evaluation on MAP will be performed together with the interim evaluation of the specific "Entrepreneurship and Innovation Programme" of the successor programme CIP. This evaluation is scheduled to be completed in December 2008 and will analyse the results and impacts of MAP.

Globally, it can be concluded that the financial instruments under MAP have helped to address some gaps and failures in capital markets for start-up companies and SMEs. In general, MAP financial instruments reached the objective of improving the financial environment for European business, especially for SMEs. The financial instruments were implemented in an appropriate and effective way, and via the high leverage effect. They leveraged a significant amount of additional money and supported a substantial number of SMEs.

Lastly, the Competitiveness and Innovation Framework Programme (2007 to 2013) (CIP), successor programme of the MAP, is a coherent response to the objectives of the growth and jobs strategy. The legal base for the CIP entered into force on 29 November 2006.

COM(2008)0708
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This Commission Staff Working Document accompanies the annual report from the Commission on the financial instruments of the multiannual programme for enterprise and entrepreneurship, and in particular for small and medium-sized enterprises (SMEs) (2001-2006). It covers the four Community financial instruments ("measures") implemented under MAP, i.e:

SME Guarantee Facility; Start-up Scheme of the European Technology Facility (ETF Start-up Facility); Seed Capital Action; Joint European Venture (JEV) programme.

The report includes specific conclusions of the abovementioned financial instruments. These are as follows:

SME Guarantee Facility : to recall, the objective of this Facility was to promote entrepreneurship and to enhance growth and competitiveness, by improving the financial environment for business, especially for SMEs.

The report concludes that the SME Guarantee Facility has had a strong impact over the entire programme period and has undoubtedly improved access to finance for SMEs . The entire budget has been used and nearly 194 000 enterprises, representing about 1% of existing European enterprises, have benefited. This figure also represents more than 10% of newly created enterprises.

It allowed Financial Intermediaries to increase substantially the volume of loans they granted to SMEs and to take on higher risk. There is further added value, particularly in the Micro-credit Window, where "disadvantaged" groups have also benefited from the programme.

The Facility has a high leverage effect, especially under the Loan Guarantee Window, where for each EUR 1 000 of EC money committed, there is more than EUR 80 000 of loan volume.

The rather flexible, market-driven structure of the SME Guarantee Facility has meant it could be easily adapted to different market, national and regional conditions, allowing it to achieve both a wide range of application and a broad geographical distribution. A higher level of transparency has been achieved by increased monitoring and reporting requirements, which must be carried through all the way down to the final beneficiaries. Visibility of the EU contribution was ensured through a requirement for the FIs to mention the EU support in the loan agreements with SMEs.

The Loan Guarantee window proved to be an appropriate scheme for most Financial Intermediaries, allowing them to significantly increase their financing to SMEs. It is by far the most used of all windows in terms of monies committed.

The Micro-credit window allowed some of the Financial Intermediaries to enter into the field lending to micro-enterprises, which may have been previously excluded from access to finance. It also improved access to finance for the self-employed and some disadvantaged groups.

The Equity Guarantee window was little used. It guarantees larger investments for fast-growing high-tech companies, which means that the target group is similar to that of Venture Capital (VC) funds and therefore limited overall. There were also some technical constraints.

The ICT Loan Guarantee window, designed as a sectoral window, did not attract any demand, due to its narrow focus. It is assumed that part of such ICT investments are covered by the "general" Loan Guarantee window.

ETF Start-up Facility : the objective of ETF Start-up was to increase the availability of risk capital to innovative SMEs during their creation and their early stage development. The facility is tailored to the strategically important area of seed and early stage investments in mainly high tech enterprises with high growth potential. The demand for early stage funding remains strong and European technology centres (especially research centres and universities) continue to generate valuable results in terms of concepts and intellectual property rights.

The entire budget allocated to ETF Start-up has been used. ETF Start-up has often had a catalytic effect in the establishment of early stage VC funds making it possible to attract more investors and thereby allowing funds to invest larger amounts, to have more resources available for follow-on investments in selected SMEs and to achieve a more commercially viable size. The improved market cycle in 2006 resulted in the recovery of the venture capital market, with a significant impact on the number of new investments under ETF-Start-up, although investors remained much more reluctant to invest in early stage enterprises than later those in later stages of development. The EIF’s investment in VC funds under ETF Start-up also gave a degree of reassurance regarding the quality of the funds, thus helping to attract other investors.

Seed Capital Action : the Seed Capital Action (SCA) aimed to stimulate the supply of capital for the creation of innovative new businesses with growth and job-creation potential, including those in traditional economic sectors, through support for seed funds, incubators and similar schemes. The report highlights that the demand for this instrument was significantly below expectations . Constraints in terms of eligibility criteria and difficult market conditions for seed capital meant that demand was limited. Based on this experience, the instrument will therefore be modified under the CIP programme .

The JEV programme : this programme aimed to encourage joint ventures between European SMEs in the European Economic Area, thereby helping them to benefit from the opportunities offered by the single market.

The report concludes that demand for JEV from the market was much lower than originally expected. Although the logic behind the JEV programme was considered sound, time has shown that there was in fact relatively little demand from SMEs for support for the creation of transnational joint ventures in the EU. In reality, SMEs investing in other Member States often preferred to create subsidiaries rather than joint ventures, or to enter into looser cooperation agreements without the obligation to create a new legal entity. Take-up of the programme may also have been affected by the need to impose thorough controls on the processing of applications in order to ensure sound financial management and reduce the risk of irregularities to the minimum. As a result, file processing times were longer than expected by the SME target group.

SEC(2008)2750
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This is the third annual MAP progress report. To recall, MAP was set up, initially, to cover the period 2001-2005 but was later extended to the end of 2006. The report covers the three financial instruments set up by MAP namely: the SME Guarantee Facility; the ETF Start-up Facility and the Seed Capital Action.

SME Guarantee Facility: The objective of this Facility is to promote entrepreneurship, enhance growth and competitiveness and to improve the overall financial environment for SMEs in the Community. It does so by seeking to encourage the growth of SMEs through increasing their debt financing. The Facility provides higher volumes of guarantees for existing guarantee products of the Financial Intermediaries (FIs); by offering access to financing for a larger number of small companies and by offering a wider variety of investments and guarantees for riskier loans. In addition, the SME Guarantee Facility covers part of the losses incurred under the guarantees up to a pre-determined amount (the cap). It applies only to companies with up to 100 employees. In short, the Facility offers: Loan Guarantees; Micro-credit Guarantees; Equity Guarantees; and ICT Guarantees.

At the end of 2005, the budgetary resources committed under the SME Guarantee Facility amounted to EUR 267.50 million – representing 64.3% of the total MAP budget. As far as the “utilisation” of the Facility is concerned (meaning the aggregate volume of guarantees issued by the EIF in relation to the signed agreements between the EIF and the FIs under the facility), at the end of 2005 the average utilisation reached 67% for the Loan Guarantee window, 66% for the Micro-credit window and 65% for the Equity window. This is fully in line with expectations.

Guarantee schemes, in general, have a very high leverage effect as do Loan Guarantees as they are often provided in the form of counter-guarantees to institutions that in turn provide guarantees to other actors such as intermediaries and banks. Due to the risk-sharing between these various actors the leverage, in terms of volume of loans supported, is very high.

The number of final beneficiaries increased progressively and stood at nearly 140 000 at the end of 2005 (of which more than 115 000 under the Loan Guarantee window). In 2005 about 570 000 persons were recorded as employed at the date of the loan issues against less than 310 000 in 2004. At the end of 2005 Final Beneficiaries with up to 10 employees made up 91% of the total number of SME’s under the Loan Guarantee window, 100% under the Micro-credit window and 64% under the Equity Guarantee window. These figures clearly demonstrate that the SME Guarantee Facility remains focused on its target population as set out in the EU “Charter for small enterprises”.

ETF Start-up Facility: The purpose of the ETF Start-up Facility is to increase the availability of risk capital to innovative SMEs during their creation and their early state development. It invests in specialised venture capital (VC) funds that have been made available to provide equity or other forms of risk capital to SMEs. At the end of 2005 the budgetary resources committed under the ETF Start-up amounted to EUR 143.20 million, representing 34.4% of the MAP budget.

Since the start of MAP, 12 requests for approval have been submitted to the European Commission for approval. Nine have been signed by the EIF with VC funds. One investment of EUR 15 million in Germany is still under negotiations. For the remaining two approved proposals, the operations have not materialised. Five out of the ten contracts were signed in 2005. Several deals are still in the pipeline. If successful they should materialise in the course of 2006.

In general, the VC funds, in which the EIF has invested, have an international, national or regional focus. Funds are mainly oriented towards early stage investments in high technology sectors, such as information and communication technologies, internet, healthcare and life sciences. Given that the VC funds are still in the early stages of their investment periods it is too early to provide any meaningful data on their employment potential. Up to December 2005, the VC funds had invested in 35 portfolio companies, which reported a total of 568 employees as of June 2005.

Seed Capital Action: The purpose of the Seed Capital Action is to stimulate the supply of capital for the creation of innovative new businesses with growth and job creation potential, including those in the traditional economy, through support for seed funds, incubators or similar schemes. At the end of 2005 the budgetary resources committed under the SCA amounted to EUR 5.6 million, representing 1.3% of the MAP budget committed until the end of 2005. The VC funds approved through the SCA scheme have contractual agreements with the EIF under the ETF Start-up initiative. By the end of 2005 three grant agreements were signed with the two VC funds.

Conclusions: The Commission concludes its report by stating that the SME Guarantee Facility has had a positive market take-up. The Loan Guarantee and the Micro-credit windows have been particularly successful allowing the participating Financial Intermediaries to increase volumes and to take on more risk. At the end of 2005 the Facility covered 27 countries and 45 portfolios of 41 Financial Intermediaries.

The implementation of the ETF Start-up Facility has, on the other hand, faced some difficulties in the period 2002 to 2003, due to the difficult fundraising situation prevailing on the EU venture capital market. Precisely for this reason, the report argues, the ETF Start-up Facility has a key role to play as a unique and important European financial instrument fostering investments in strategic sectors. The demand for early stage funding remains important and European technology centres (especially research centres and universities) continue to generate valuable results in terms of concepts and intellectual property rights.

Regarding Seed Capital Actions, the programme has not been as successful as originally hoped – largely due to constraints relating to eligibility criteria and difficult market conditions for venture capital in the MAP starting period. Only three grant agreements have been signed so far.

The successor programme to MAP, the “Competitiveness and Innovation Programme” or CIP was adopted in 2006. CIP will bring together, within a coherent framework, specific Community support programmes and relevant parts of other Community programmes in the fields most critical to boosting European productivity and innovation capacity whilst at the same time respecting environmental concerns.

COM(2007)0235
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PURPOSE: Report on the implementation of the European Charter for Small Enterprises.

CONTENT: This is the fifth annual implementation report on the Charter, based on national reports from the participating countries. It presents a snapshot of the main developments from autumn 2003 to autumn 2004 but does not aim to provide a comprehensive overview of all existing measures. It identifies strengths and weaknesses across the EU and its neighbours, highlights promising national measures and issues recommendations for future action, thereby strengthening policy in support of small businesses and maintaining the efforts towards the Lisbon objective.

This report is complemented by supporting documents, which give a comprehensive overview of recent measures undertaken to implement the Charter by the Member States and Norway, the candidate countries, Moldova and the countries of the Western Balkans, as well as the Commission.

COM(2005)0030
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The European Commission has presented a report on the Multiannual Programme for Enterprise and Entrepreneurship, and in particular for Small and Medium-sized Enterprises (SMEs) (2001-2005), MAP for short, is a framework programme composed of a set of activities which are designed to improving the overall business environment in Europe. The Programme activities are grouped within three pillars: Policy Development; European Info Centre (EIC) Network and Financial Instruments. The aim of this external evaluation of the Programme is to provide information and recommendations in order to improve the current MAP and to contribute to the development of a potential successor programme. It has been prepared as a final evaluation, although, as the programme is still running, it has often not been possible to identify or examine final results and impacts.

The report states that the Multiannual Programme (MAP) addresses a wide range of issues hampering business creation and development in Europe. While it contains activities in many policy areas, it was found that innovation and business co-operation/internal market are inadequately supported by the current programme. On the other hand, the programme shows an advanced level of implementation and clear direct outcomes (as of 31/03/2004 171 policy development outcomes could be identified, the MAP had provided support to 276 EICs and other centres, 41 deals had been made with financial intermediaries). Therefore it is expected to achieve its global objectives. Effectiveness is generally high, and the overall relation of costs and benefits (efficiency) seems adequate. However, certain policy development measures (databases, portals) are less efficient than other activities (Best projects, benchmarking studies), while some specific financial instruments (Joint European Venture, SME Guarantee-ICT loan window) have proved inefficient in their actual form and in the current business context.

The programme and its elements have so far been useful to directly involved actors (national policy makers, EICs, financial intermediaries) who have benefited from new and complementary resources (information, knowledge, methods, dissemination material, events, products, additional funding). Through these intermediaries, general support for enterprises has been enhanced and/or increased in many European countries, and thus the overall business environment has been improved. The exact impact of the overall MAP on businesses proved impossible to measure, but in addition to some direct effects on SMEs. More than 170,000 SMEs have got access to loans through MAP financial instruments.

The report recommends that for the current programme, strategic links between the European Charter and MAP should be strengthened, e.g. using the Charter Implementation Reports as a means of feeding back information on the effects of MAP policy development actions into the MAP Implementation Reports. Dissemination of MAP as an overall programme, emphasising its activities and results, should be widened in order to enhance visibility, and thereby raise awareness and understanding of the MAP, strengthening its take-up. Further recommendations are included under the specific MAP element headings.

The diversity of measures and areas to be covered in any successor programme should be maintained, while building on a common strategic framework (with an enhanced and better integrated system of goals, objectives, and expected results). Links to other initiatives such as the Structural Funds and the R&D Framework Programme should be strengthened. Innovation and the support of business co-operation in the internal market should be integrated/strengthened as activity fields. Linkages between different programme elements (e.g. active information and advice on financial instruments through EICs) should be enhanced.

1) Policy Development : the principal recommendation for policy actions under the current MAP 2001-2005 is to strengthen dissemination activities directly (at European level, e.g. publications in all official languages, linking publications to events) and indirectly (fostering dissemination at national level, towards regional authorities and entities, and to businesses). Sufficient time should be allowed for projects to come to fruition and for the thorough elaboration of recommendations. Where appropriate different points of views (academic, policy-maker, business/private sector) should be reflected in the composition of expert and working groups.

A follow-up programme should concentrate on benchmarking and exchange-of-best-practice projects (in line with related studies, events, publications) and less emphasis should be given to single support activities such as databases, tools, or one-off publications. New actions such as capacity building, training, follow-up and long-term projects should be developed to complete the policy pillar. A recommendation is made on improving joint decision-making procedure in the programme management committee and adapting implementation and performance assessment procedures/tools (indicators) to enhance the monitoring and evaluation of the overall programme and its specific activities (this last recommendation could be applied to all the pillars).

2) European Information Centre Network (EIC): within the current programme a recommendation is made to improve the promotion of the EIC network and its potential, both to enterprises and in the European Commission, through awareness-raising measures. The role of EICs as a feedback mechanism to Commission Services and as a tool to reach Europe's 24 million or so SMEs (as in the campaigns covering the EURO and enlargement) should be significantly strengthened. Amendments regarding the EIC audit procedures, EIC support to weaker EICs through training and staff exchanges, the publication of EIC promotional material in all official languages and the support of networking between EICs at national level are also recommended.

In a future multiannual programme, EIC basic services, contractual procedures and financing, should be adapted to the current circumstances. Additional tools for promoting business co-operation should be offered; the network's stability enhanced through longer contracts (if this is compatible with Community Financial rules); the level of financial support should reflect real EIC activities and differences between more basic and advanced EICs. In the future, the support and coordination structure should also be made less complicated and more efficient. Finally, enhanced coordination and rationalisation with other Community Support Networks should also improve the EIC's efficiency and make them more visible and more accessible for final clients.

3) Financial Instruments : the recommendations concerning the present MAP involve major promotion of the "MAP brand" (alongside that of the EIF) with financial intermediaries, national financial and business organisations in order to enhance the visibility of Community Financial Instruments. Better and wider disseminated information as well as support for networking/exchange of experience between financial intermediaries should be provided for. A recommendation is made on increasing the budget in proportion to the EU enlargement (SMEG in particular) – this step was partially realised in 2004. For a future programme a recommendation is made for the ETF-SU Business Incubators window to be closed: it has not been effective and is not expected to be in the short/mid-term. The SMEG ICT-Loan window should also be closed: it has not been effective (largely due to the bursting of the internet bubble) and is in fact covered by the general SME Guarantee Loan window. SCA should be opened to funds without regard to prior EIF investment. Finally, ETF-SU eligibility criteria should be more flexible – consideration should be given to accepting as partners in funds universities and other public bodies as "private", provided they can demonstrate that they are market-driven and have their own legal personality, board, budget and financial resources (i.e. not limited to public funding).

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COM(2004)0064
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COM(2003)0713
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The Commission has presented its annual report on the implementation of the European Charter for Small Enterprises.

At Feira, the European Council endorsed a Charter for Small Enterprises, a statement both of the reasons why it gave central importance to small business and of its commitment to act in their support. The Charter has become a pillar of the European Commission’s enterprise policy and a cornerstone of the policy of the Member States. Think small first sums up the essence of the EU’s enterprise policy, and the Charter is in the mainstream of that approach.

The Annual Implementation Report on the European Charter for Small Enterprises, which is based on a survey of work being carried out in the Member States and in the Commission in support of small business, shows that real progress has been made and that more is in the pipeline. It also shows that success in one or another Member State has often stimulated success in others.

The report shows that a number of broad trends can be identified:

in a number of fields progress is being made, but it will be some time before results make themselves fully felt for instance in the area of education. Preparation for business has traditionally not played a major role in education, but it now features in one way or another in secondary schools in approximately two thirds of Member States. A similar picture is evident in respect of tertiary education; progress in some fields is quite dramatic. One such is the process of setting up a new firm. For sole proprietorships a business can be established in two days or less in eight Member States and for minimal costs. For private limited companies, a business can be established in under two weeks in ten Member States (in several of 6 them, in less than one week), while the costs are below EUR 500 in six Member States; there are signs of increasing political commitment. An example is the simplification of regulation, business impact assessment and alternatives to regulation. More than half of the Member States either routinely apply business impact assessments or are in the process of setting up systems to do so; while the majority of Member States have made real progress on issues like education for entrepreneurship, some Member States still apparently make no provision whatever to promote entrepreneurship through the education system; the problem of finance for start-ups and small enterprises has become more acute over the past six months, mainly due to the deteriorating economic situation but also because of the re-organisation of the banking sector. In addition, risk capital has become shyer. Even good proposals from small enterprises may not receive finance if they cannot offer guarantees or a higher share of equity; there are plenty of good examples of successful methods in need of further exploitation. Businesses that start in an incubator have a much higher success rate than others. 90 % of start-ups in incubators were still active three years later. Yet, if the number of business incubators is growing, their use across the EU is rather uneven; finally, the issue that is perhaps least satisfactorily addressed is that of how to ensure more effective representation of small enterprises’ interests at EU and national level. There needs to be constant pressure for their interests to be taken into account. Better representation of their interests, however difficult it may be, is an urgent necessity in all policy fields.

COM(2002)0068
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COM(2001)0122

Decision 2000/819
OJ L 333 29.12.2000, p. 0084

CES1429/2000
OJ C 116 20.04.2001, p. 0020

T5-0487/2000
OJ C 197 12.07.2001, p. 0226-0413

Debate in Parliament

T5-0487/2000

A5-0267/2000
OJ C 197 12.07.2001, p. 0006

A5-0267/2000

CDR0185/2000
OJ C 022 24.01.2001, p. 0010

EUR-Lex
OJ C 311 31.10.2000, p. 0180 E
COM(2000)0256

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COM(2000)0256