Europe with 70 billion in technological fight with the US

The European Investment Bank has announced the launch of a large new initiative, which intends to invest € 70 billion in European technology companies and innovators by 2027. With this financial package, the bank seeks to eliminate the investor gap between Europe and the United States and also encourage private investors to participate in projects, which could release up to 250 billion euros in investments in the European technology sector. The goal is ambitious: to support European ideas on the way from design to possible first public offerings (IPO), thus strengthening the technological sovereignty of the old continent.

« This is the largest program so far, intended exclusively for the support of European innovations and technological management, » she is for a German business Handelsblatt emphasized the President of the EIB Group Nadia Calviño. The central part of this strategy will be the new Teche platform, which is expected to come to life this year. It is designed as a single entry point where researchers and businesses will be able to find all the necessary information in one place and submit applications for financing. Calviña promises to make the European Union support « more extensive, faster and simpler. » EIB will work closely with the European Commission, and national promotional banks, such as German KFW, can join the participation.

The new initiative also includes support for the « exits » of the founders of companies and venture capital investors. It is often the case that these promising shares sell to US investors who have greater resources. In the future, EIB could help European companies in the acquisitions of promising startups, thus preventing the outflow of technologies from Europe. The entire plan must also be approved by the Bank Governors Council, consisting of the finance ministers of 27 EU Member States. President Calviño presented her vision to the ministers at a meeting in Brussels and hoped for a positive decision in June this year.

Europe as a magnet for talent and capital?

Calviño sees an opportunity for Europe even in the current economic policy of US president Donald Trump And the uncertainty it causes. « The current situation in the United States is creating an opportunity for Europe to attract talents, investments and capital, » she said. « We perceive the interest of international investors in Europe. »

This opinion is also indirectly confirmed by the US warnings. In recent weeks and months, the US administration has significantly reduced research funding at reputable institutions such as Harvard and Columbia University. American researchers are already warning against brain escapes, as leading scientists are leaving the country. Former President of the Massachusetts Technology Institute (MIT) Leo Rafael Reif is in the magazine Foreign Affairs wrote that it seems as if Trump’s administration was determined to destroy one of the biggest benefits of the United States. In his opinion, the recent cut into university funding risks « draining a key source of new ideas for industry and the military. »

In this geopolitical environment, Calviñova emphasizes that Europe is « a lighthouse of stability, clarity and trust, » what investors seek. EIB is also the only multilateral development bank, whose shareholders are exclusively EU Member States. « We do not face the same uncertainty as other multilateral development banks, » he says, which strengthens the international role of EIB. Last year, the bank lent EUR 89 billion for various projects, and this year it is planning to loan EUR 95 billion.

From conservatism to a greater risk of breakthrough innovation

EIB is not just a lender; Through the European Investment Fund (EIF), which is part of the EIB Group, it also assumes ownership stakes in companies and is considered to be the largest European venture capital financier and the largest provider of debt risk. The new Techeu platform is expected to link different existing EU funding programs for researchers and startups, which means that each project will only be evaluated once.

« This is the largest program so far, intended exclusively for the support of European innovations and technological management, » EIB President Nadia Calviño emphasized as German business newspaper Handelsblatt. Photo: Javier Soriano/AFP

However, according to some, the visible role of EIB in the field of venture capital also indicates the underdevelopment of European private capital markets. Calviña says that the new initiative is aiming at promoting a private risk ecosystem of venture in Europe, with the hope that European startups will no longer have to go to the United States after capital when they need to finish their own business.

Nevertheless, EIB is also facing criticism that it is too often too conservative in its investments. Former European Central Bank President and EU Special Advisor Mario Draghi In his last year’s EU competitiveness report, he called on a bank to take more risks to promote breakthrough innovation. Calviña replies that the EIB has already become more willing to risk and that it intends to continue with the Teche program, which is expected to support an additional thousands of EU champions and innovators each year. At the same time, the EIB must retain its credit assessment of the AAA, which enables it to borrow in capital markets and transfer these funds to companies.

Former President of the European Central Bank and EU Special Advisor Mario Draghi, in his last year’s EU competitiveness report, urged the bank to take over more risks to promote breakthrough innovations. Photo: Johanna Geron/Reuters

The President of the EIB also promises a reduction in bureaucracy, with the aim of accepting decisions on risk financing in six months, which is significantly faster than the current 18 months. « That would mean a turning point, » Calviñova points out, as the technology sector often complains of too long responsive times. The decision -making speed is often crucial for startups that fight time and competition.

Defense sector as a new innovation engine

An additional acceleration of innovation could also be given by the defense sector. The EIB has recently ranked defense as its key strategic priorities and now also funds exclusively military projects. « Investments in safety and defense can certainly contribute to a technological agenda, » said Calviño. The bank is already under preparing 22 projects in this area, supporting, among other things, by unmanned aircraft and space companies and several venture capital funds focused on defense.

An additional acceleration of innovation could also be given by the defense sector. Photo: Tingshu Wang/Reuters

According to Nadie Calviño, Europe has almost everything necessary to eliminate the technological gaps with the US: “Europe has a very large market with a population of 450 million, excellent universities, excellent research centers and companies and glossy startup ecosystems. With deeper and larger capital markets, we can ensure that technologies and startups born in the European Union can be financed and grow in Europe. ”The realization of this vision will depend on the successful implementation of the new, 70-million-dollar program, which awaits the final approval of European finance ministers.