Europe's small and medium-sized enterprises are the motor of the

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					Introduction

Europe‟s small and medium-sized enterprises are the motor
of the European economy and the main drivers for achieving
sustainable growth and more and better jobs.

Small enterprises are the foundation of the European
economy – it is mainly through the start-up and growth of
such small firms that new jobs are created, new value-adding
products and services are launched on European and world
markets, and Europe‟s competitiveness can be improved.

Small and medium-sized enterprises – in principle firms with
fewer than 250 employees, with annual turnover of less than
€50 million, and independent of larger enterprises – make up
the backbone of the European economy.

Across the EU, there are around 23 million SMEs; that is
99% of all enterprises.

And SMEs account for about 75 million jobs. And in some key
industries, such as textiles, construction and furniture-
making, they account for as much as 80% of all jobs.

 But companies of small size (up to 50 employees) face
specific problems in doing business, due to their difficulties
in obtaining sufficient resources – both human and financial.
Moreover, small enterprises face disproportionate costs in
complying with the administrative burden which results from
the regulations of public authorities at all levels, so-called
„red tape‟.

Thus, whilst the importance of Europe‟s SMEs, in economic
terms, is widely recognised, there are simply not enough
entrepreneurs and SMEs growing and creating new jobs.

There are two major reasons for this:


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   first, not enough European citizens are attracted to
    the professional challenges and risks of starting or
    running an SME; and
   second, legislation and regulation complicates the
    work of SMEs and/or adds to their costs, not least in
    respect of taking on additional employees.

The over-riding challenge for the European Union and its
Member States is to create conditions in which
entrepreneurs are encouraged to follow their ideas through,
where the attractions and potential gains outweigh more
clearly the costs and inevitable risks of starting an
enterprise.

Moreover, the conditions in which businesses operate need to
be reviewed, to remove those unnecessary and
disproportionate costs and procedures which stifle the
creativity and growth of smaller enterprises.



A charter to support Europe’s small firms


The European Charter for Small Enterprises, endorsed by
the Heads of State or Government in June 2000, seeks to
improve the business environment for these small enterprises
throughout the European Union‟s 27 Member States in ten
areas:

   1. Education and training for entrepreneurship – at all
      levels of school, further and higher education
   2. Cheaper and faster start-up – simplifying the
      procedures to create a new firm
   3. Better legislation and regulation – assessing regulation
      for its impact on small firms, and where possible
      simplifying or removing altogether obligations on SMEs


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  4. Availability of skills – ensuring training institutions
     orientate courses to train people in the skills needed by
     small enterprises
  5. Improving on-line access – reducing costs and making
     small firms‟ dealings with government more efficient
  6. More out of the Single Market – continuing progress to
     remove barriers to trade and ensure fair competition in
     the internal market
  7. Taxation and financial matters – encouraging
     investment in small firms through ensuring tax and
     regulatory systems are favourable, and in particular
     that they reward success
  8. Strengthen the technological capacity of small
     enterprises, ensuring that they are able to access and
     make use of any technology which could benefit their
     business
  9. Successful e-business models and top-class small
     business support – encouraging and enabling small
     enterprises to make the most of new opportunities in
     this areas
  10.    Develop stronger, more effective representation of
     small enterprises‟ interests at Union and national level,
     ensuring that policy-makers are fully aware of the
     specific interests of small firms


In addition, the European Union has competences in many
policy areas which directly affect SMEs. Some of these,
competence is shared between the EU, Member States and
their regions. Success in making Europe an SME-friendly
business environment will therefore require concerted
efforts from all relevant authorities to ensure the various
policies complement each other.




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    In 2005, the European Commission adopted its „Modern SME
    policy for growth and employment‟. This aims to ensure that
    all aspects of EU policy to help SMEs are coordinated, and
    that the needs of SMEs are more fully assessed in drawing
    up such policies. The policy includes action in five areas:

      Promoting entrepreneurship and skills
      Improving SMEs‟ access to markets
      Cutting red tape
      Improving SMEs‟ growth potential
      Strengthening dialogue and consultation        with   SME
    stakeholders


    Early and wide consultation with SME representatives is
    essential, so that they can have meaningful input in the
    policy-making process, and central to the „modern SME
    policy‟. One way of doing this is through the EU-funded
    network of Euro Info Centres, which assist SMEs in
    particular to obtain information on EU policies and actions,
    and can consult quickly with firms in their region on specific
    policy questions.

    The Better Regulation initiative is a comprehensive review of
    all existing EU legislation, to reassess whether its aims
    remain necessary, and whether the means used to achieve
    them could be simplified. The Commission has called for
    Member States to undertake the same exercise at national
    level, highlighting the potential for a saving of as much as
    25% in firms‟ administration costs. Furthermore, the „Think
    first‟ principle ensures that legislative proposals are all
    assessed for their impact on SMEs, and where necessary
    adapted to make them SME-friendly.



    Under the modern SME policy, the Commission seeks to


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highlight examples of successful initiatives and encourage
Member States and regions to learn from each other. For
example, the European Enterprise Awards highlight and
reward regional initiatives with strong results in encouraging
small businesses. Furthermore, by encouraging and supporting
networking across Europe, the Commission aims to help SMEs
gain easier access to new markets outside their own country.




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Support to SMEs

Apart from policy measures, the European Union provides
support to European small and medium-sized enterprises
(SMEs) in different forms such as grants, loans and, in some
cases, guarantees.

Support is available either directly or through programmes
managed at national or regional level, such as the European
Union‟s Structural Funds. SMEs can also benefit from a series
of non-financial assistance measures in the form of
programmes and business support services.

This tool aims to present the main European programmes
available to SMEs and contains brief information as well as the
main web sites for each programme. Please note that the
information included is not exhaustive.

The assistance schemes fall into four categories:

  1. Thematic funding opportunities

     This type of funding is mostly thematic with specific
     objectives - environment, research, education - designed
     and implemented by various Departments of the European
     Commission. SMEs or other organisations can usually apply
     directly for the programmes, generally on condition that
     they present sustainable, value-added and trans-national
     projects. Depending on the programme, applicants can
     also include industrial groupings, business associations,
     business support providers and/or consultants.

     Co-funding is the general rule: the support of the
     European Union usually consists of subsidies which only
     cover part of the costs of a project.


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  2. Structural funds

     The Structural Funds (European Regional Development
     Fund [ERDF] and European Social Fund [ESF]) are the
     largest Community funding instruments benefiting SMEs,
     through the different thematic programmes and
     community initiatives implemented in the regions. The
     beneficiaries of structural funds receive a direct
     contribution to finance their projects.

     Note that the programmes are managed and the projects
     selected at national and regional level.

  3. Financial instruments

     Most of the financial instruments are only available
     indirectly, via national financial intermediaries. Many of
     them are managed by the European Investment Fund.

  4. Support for the internationalisation of SMEs

     These generally consist of assistance to intermediary
     organisations and/or public authorities in the field of
     internationalisation, in order to help SMEs to access
     markets outside the EU.

Where can I get help locally?

  1. The Euro Info Centres (EIC) network

     The European Commission created the EIC network in
     1987 to support small and medium-sized enterprises and
     ensure they are well prepared to take advantage of the
     opportunities the EU single market offers. The network's


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mission is to inform, advise and assist businesses on
Community matters, as well as providing feedback to the
European Commission about EU issues affecting SMEs.

One of the EICs‟ core activities consists in informing
enterprises about EU matters. EICs directly answer
about 360,000 queries from SMEs every year. They
concern a wide range of issues, such as business co-
operation, Commission programmes and funding and
general EU matters. EICs have expertise in areas of
specific interest to companies such as: public
procurement, business co-operation, financing, market
research and European legislation. EICs also help
companies to apply for Commission projects and fulfil
administrative formalities. They have a direct access to
the European Commission and are supported by a team of
experts in Brussels, assisting them in answering the most
complex questions.

Information is also provided to companies through
awareness-raising activities (participation in fairs,
organisation of seminars, lectures, workshops…) and a
range of publications offered in local languages (guides,
newsletters, websites…).

Regardless of what stage of a business cycle a company is
in or what level of familiarity it has with European
affairs, the EIC network can help. It assists companies to
take advantage of business opportunities and can expose
them to markets and possible partners in 46 countries
with just one call. The result for SMEs of having a well
co-ordinated network at its fingertips is that they can be
assured of efficient and effective strategic help. EICs
also organise trade missions and provide information on
programmes which relate to both EU and non EU
countries and internationalisation.


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  Euro Info Centres not only provide SMEs with their
  resources and skills, but also refer them to other support
  agents when specific assistance is required.

  The Euro Info Centre network has around 300 offices
  spread across 45 countries. These include all Member
  States, the Candidate Countries, the EU‟s most remote
  regions, the European Economic Area and the
  Mediterranean basin.

  Further details:

  http://ec.europa.eu/enterprise/networks/eic/eic.html

2. Innovation Relay Centres Network

  The Innovation Relay Centres (IRCs) are a network of
  centres in the European Union and beyond, providing local
  help to promote technology partnerships and transfer.
  The IRCs are innovation support service providers mainly
  hosted by public organisations, to facilitate and promote
  the transfer of innovative technologies among European
  SMEs.
  The IRC Network is currently composed of 71 IRCs and
  236 regional offices in 33 countries.

  Find your local IRC Contact Point at:

  http://irc.cordis.lu/whoswho/home.cfm

3. SME National Contact Points (NCPs)

  A list of SME National Contact Points (NCPs) for FP7 is
  available on the CORDIS web site. The European
  Commission supports the network of SME National
  Contact Points (NCPs) to provide practical information,
  assistance and training to potential participants and



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      contractors under the Framework Programmes for
      Research and Technological Development.

      Further details: http://cordis.europa.eu/fp6/ncp.htm

Other sources of information

     Directorate-General     Enterprise    and    Industry –
      European                                      Commission:
      http://ec.europa.eu/enterprise/index_en.htm
     SME                                                policy:
      http://ec.europa.eu/enterprise/smes/index_en.htm
     The “grants and loans” database on the “Europa” website
      gives an overview of all EU programs and instruments:
      http://ec.europa.eu/grants/index_en.htm
     TED, tenders electronic daily: database of public
      tenders published in the Official Journal of the European
      Union: http://ted.europa.eu/
     Your Europe: this portal gives individuals and businesses
      practical information on their rights and opportunities in
      the EU as a whole and in the individual Member States:
      http://europe.eu.int/youreurope/




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The EU contribution to SME financing

The Commission works both at the policy level, by developing
policy and helping EU Member States share good practices, and
at the practical level, by designing and implementing EU
financial instruments.

The Financial Instruments, which take place under the
Multiannual Programme for Enterprise and Entrepreneurship
and particularly for SMEs (2001 - 2007), known as "MAP",
intervene where a market gap has been identified in the
provision of debt or equity finance to SMEs. The financial
instruments cover SMEs‟ different needs according to the
stage in their life-cycle:



1. The ETF Start-up providing risk capital to venture capital
funds for seed and early stage investments in SMEs The ETF
Start-up scheme reinforces the European Technology Facility,
established by the European Investment Bank (EIB) in co-
operation with the European Investment Fund (EIF), by
adopting an investment policy involving a higher risk-profile,
both as regards intermediary funds and their investment
policies. ETF Start-up is implemented for the Commission on a
trust basis by the EIF. The EIF invests Community funds
allocated for the scheme in relevant specialised venture capital
funds, such as:

     seed funds, smaller or newly established funds

     funds operating regionally

     funds focused on specific industries or technologies



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     venture capital funds financing R&D, e.g. funds linked to
      research centres and science parks which in turn provide
      risk capital for SMEs.

The EIF can invest a maximum of 25% of the total equity of
the intermediary venture capital fund. Business incubators can
also be eligible if they are managed as funds (i.e. they invest in
the companies in the incubator).

Enterprises wishing to apply for an equity investment under
ETF Start-up need to contact one of the funds that have
signed an agreement with the EIF. It should be noted that
these funds take their investment decisions based on normal
commercial criteria.


2. The SME Guarantee Facility, providing loan guarantees to
encourage banks to make more debt finance available to SMEs,
including microcredit and mezzanine finance, by reducing the
banks‟ exposure to risk

The SME Guarantee Facility provides co-, counter- and direct
guarantees to financial institutions providing loan guarantees,
loans and equity to SMEs. It is implemented for the
Commission on a trust basis by the European Investment Fund
(EIF).

The Facility has 4 windows:

     the Loan Guarantee window, providing guarantees for
      loans to enterprises with growth potential and with up to
      100 employees



     the Microcredit window, providing guarantees for loans
      of up to € 25,000 to micro-enterprises with up to 10



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      employees, particularly entrepreneurs starting a business

     the Equity Guarantee window, providing guarantees to
      existing equity guarantee schemes in order to support
      own funds investments in enterprises with up to 249
      employees

     the ICT Loan Guarantee window, providing guarantees
      for loans for investments in information technology
      equipment, software and relevant training, to enterprises
      with up to 100 employees

3 The Capacity Building Scheme, - Seed Capital Action
supporting the recruitment of specialised staff by seed capital
funds

The is designed to stimulate the supply of seed capital for the
creation of innovative new businesses with growth and job
creation potential. It is implemented for the Commission on a
trust basis by the European Investment Fund (EIF).

The Action provides grants to support the long term
recruitment of additional investment managers in order to
reinforce the capacity of the venture capital and incubator
industries to cater for investments in seed capital.

The Action is open to seed funds, incubators or similar
organisations that include seed capital investments in their
activities. A grant of € 100 000 per staff member recruited is
available, with an overall maximum per beneficiary of up to €
300 000 (3 staff members). More information is available on
EIF website.



In parallel to the MAP, Preparatory and pilot actions are
regularly launched to test new financial instruments:


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     The pilot action CREA (Capital Risque pour Entreprises
      en phase d'Amorçage) promotes the offer of capital for
      the creation and transfer of small, new and innovative
      businesses with the potential for growth and job
      creation. The programme is not accepting any new
      applications.

In order to ensure continuity, the MAP financial instruments
will be succeeded by the financial instruments of
Competitiveness and Innovation Framework Programme (CIP).
The CIP financial instruments should be available from the
second quarter 2007 with a budget of over one billion euros
and should leverage around 30 billion euros in of new finance
for SMEs. The instruments will be:

     the High Growth and Innovative SME Facility (GIF),
      providing risk capital for innovative SMEs in their early
      stages (GIF1) and in their expansion phase (GIF2)

     the SME Guarantee Facility, providing loan guarantees to
      encourage banks to make more debt finance available to
      SMEs, including microcredit and mezzanine finance, by
      reducing    the     banks‟     exposure       to    risk

     the Seed Capital Action and the Partnership Action
      helping to reinforce the capacity of financial
      intermediaries to invest in and lend to SMEs

The Seed Capital Action is designed to stimulate the supply of
seed capital for the creation of innovative new businesses with
growth and job creation potential. It is implemented for the
Commission on a trust basis by the European Investment Fund
(EIF).




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The Action provides grants to support the long term
recruitment of additional investment managers in order to
reinforce the capacity of the venture capital and incubator
industries to cater for investments in seed capital.

The Action is open to seed funds, incubators or similar
organisations that include seed capital investments in their
activities. A grant of € 100 000 per staff member recruited is
available, with an overall maximum per beneficiary of up to €
300 000 (3 staff members). More information is available on
EIF website.


More debt financing – for many years the Commission has been
active in bringing bankers and SMEs together in order to
identify and reduce the main barriers the latter encounter
when looking for finance.

Practical help
     Guide for SMEs on how to work with banks: A guide on
      how to build a stable banking relationship by
      understanding bank requirements work with banks from
      July 2005:
     The conference material on how efficiently to deal
      with banks: The Commission organised in 2004-2005
      conferences on how SMEs can efficiently work with banks
      that dealt with issues like management and quality
      management, financial planning and reporting.
> Commission policies
     Financing SME growth – Adding the European Value
      (June 2006): The Communication outlines Commission
      policy on SME finance.
     Microcredit
     Guarantees



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     Round Tables between Banks and SMEs
     Report on possible Code of Conduct: The Commission
      facilitated negotiations between banking and SME
      organisations about establishing a Code of Conduct, but
      ultimately this was not approved by some banking groups.
     Effects of banks' capital requirements
      Survey about changes brought by banks' new capital
      requirements: The Commission organised a survey about
      changes that the Basel II agreement would cause in bank
      behaviour concerning SME clients.
      European legislation: All documents on banks' capital
      requirements.
      Impact studies on Basel II: A study of the Commission
      complemented the impact studies made by the Basel
      Committee on the effects of the reform on the European
      economy.
> Community programmes
     Competitiveness and Innovation Framework Programme:
      This programme for the years 2007-2013 provides
      guarantees for bank lending and microcredit. The
      financial instruments are managed by the European
      Investment Fund.
     Structural funds: At regional level the JEREMIE
      initiative allows Member States to use guarantees and
      other types of funding and support for SME finance.




 More risk capital – the provision of risk capital is crucial for
 the creation and growth of innovative SMEs. The Commission
 and the Member States are working together to formulate
 policies aimed at creating an integrated and competitive risk
 capital market.



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Commission policies
     Financing SME growth – Adding the European Value:
      this Communication from June 2006 outlines Commission
      policy on SME finance.
     Final report of the EU-US working group on venture
      capital: A transatlantic working group reviewed the state
      of venture capital investing and made recommendations
      about global policy learning in October 2005.
     Risk Capital Action Plan: The Commission's framework
      for the single market in risk capital.
     Pro Inno Europe network is intended for policy learning
      in innovation.
> Networks
     Innovation finance networks: Commission's Europa
      INNOVA network has a set of sector-specific finance
      initiatives.
     Gate2Growth.com is a pan-European business platform
      for entrepreneurs seeking financing, investors, incubator
      managers, knowledge transfer offices, and academics.


> Community programmes
     Structural funds: At regional level the JEREMIE
      initiative will allow the leverage of considerable private
      investments for revolving seed capital funds and other
      types of instruments.
      Competitiveness       and      Innovation     Framework
      Programme: This programme for the years 2007-2013
      provides incentives for private equity investors to invest
      in firms with growth potential. The financial instruments
      are managed by the European Investment Fund and there
      is a website providing further information.




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   Seventh Framework Programme for Research and
    Development: Innovative SMEs can participate in
    projects using the new Risk Sharing Finance Facility
    (RSFF) that can support applied research and the
    commercialisation of its results.
   Technology transfer programme of the European
    Investment Fund (EIF) aims to improve the capacity of
    research organisations to be involved in technology
    transfer using flexible support mechanisms.




                                                       18
                  JEREMIE
JEREMIE (Joint European Resources for Micro to Medium
Enterprises) - enhancing SME access to finance in the
European Regions
The European Commission, European Investment Bank and
European Investment Fund have launched a joint initiative to
improve SMEs‟ access to finance in the framework of
European Regions.

The initiative, called Joint European Resources for Micro to
Medium Enterprises, known by the acronym JEREMIE, will
enable European Member States and Regions to use part of
their structural funds to obtain a set of financial instruments
that are specifically designed to support micro and small and
medium enterprises.

The initiative will contribute to growth and employment in line
with the renewed Lisbon agenda, which was agreed by the
Member States meeting at the Spring Council in March 2005.

The European Commission's Communication, "Cohesion Policy
in support of growth and jobs, Community strategic
guidelines 2007-2013", stresses the importance of
improving access to finance for the development of SMEs. In
particular, it emphasises the need to enhance support on
competitive terms for start-ups and micro-enterprises,
through technical assistance, grants, as well as non-grant
instruments such as loans, equity, venture capital and
guarantees. The report highlights the added value of
undertaking these actions in cooperation with the EIB Group,
namely European Investment Bank (EIB) and European
Investment Fund (EIF).




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Working in close collaboration, the European Commission‟s
Directorate Regional for Regional Policy (DG REGIO) and the
EIB Group launched the JEREMIE initiative in October 2005
to improve access to finance for SMEs in regional
development areas, in line with the Community strategic
guidelines.

Information on JEREMIE and regional development areas and
strategic guidelines is available on the European Commission’s
Regional Policy website.

JEREMIE’S OBJECTIVES

One of the European Union‟s main instruments for supporting
social and economic restructuring across the EU are the
Structural and Cohesion Funds. They account for over one
third of the European Union budget and are used to tackle
regional disparities and support regional development through
actions     including     developing    infrastructure    and
telecommunications, developing human resources and
supporting research and development.

The European Regional Development Fund (ERDF) is a
structural fund for financing measures to promote
development and structural adjustment of regions whose
development is weak and the economic and social renovation
of areas facing structural difficulties. JEREMIE will
facilitate a process whereby EIF will enable the European
Member States and Regions to use the part of funds from
the ERDF that are allocated to SME access to finance, to
obtain a set of financial products specifically engineered for
Micro, Small and Medium Enterprises.

This earmarking of ERDF funding to JEREMIE under the EU
cohesion policy will reinforce the drive for growth and jobs.
Identifying and ring-fencing the investment provided under


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cohesion policy for competitiveness, in particular through
research and innovation, human capital, business services, will
ensure   that    cohesion     policy  continues    to    boost
competitiveness, in line with the objectives set at the Lisbon
Summit.

JEREMIE will be complementary to other SME finance
initiatives at EU level, notably the Competitiveness and
Innovation Framework Programme (CIP) that EIF will operate
from 2007 on behalf of the European Commission‟s
Directorate General for Enterprise (DG ENTR). JEREMIE
will offer different financial instruments from those
available under CIP. JEREMIE will provide a range of
instruments focused on regional level, such as investments in
regional venture capital funds, technical assistance or the
provision of equity to financial intermediaries and eligibility
will be limited to "objective" regions.

JEREMIE’S FINANCIAL INSTRUMENTS

The JEREMIE initiative foresees 3 main financial
instruments:

- Advisory and technical assistance
- Equity and venture capital
- Guarantees (both for microcredit loans and SME loans)

HOW FUNDING OPERATES

Structural funds generally provide financial assistance in the
form of grants. Under JEREMIE, it will be possible to
transform part of the grants into financial products. SMEs
will use the financial products and will then reimburse the
amounts – once reimbursed, the funds will be rolled over and
used again, instead of simply "granted" once. This means that
for each euro coming form the budget, the sum of financing


                                                              21
products could range from 2 to 10 euros. The multiplier
effect will mean that the sum of the financing products
available will be increased, bringing potential benefit to a
higher number of SMEs than the grant system.

JEREMIE‟s financial products will contribute to meet the
financial needs of the demand side, namely SMEs, but also
improving the supply side by providing wide range of services
and products to local financial intermediaries such as
technical assistance, loan guarantees, first loss piece
guarantees for securitisation.

COOPERATION WITH EIF

EIF may manage JEREMIE during the financial perspective
2007 to 2013 on behalf of the programme authorities. EIF‟s
role as manager of funds will simplify both the administrative
process of funds disbursed from ERDF and the management
of the operation programme.

EIF is a pan-European SME finance platform with a wide
geographical coverage and leads in several market segments,
notably as an early-stage venture capital investor and
microcredit guarantor. EIF has expertise as a manager of
financial products operating in support of SMEs and will
therefore be a unique counterpart to Member States in its
role as manager of JEREMIE, particularly in its ability to
adopt a tool box approach.

EIF will work with the full support of the EIB and its lending
capacity. Additional funding capacity will be brought to
JEREMIE by the EIB Group, for example, through SME
global loans from the EIB. Furthermore, Member States will
benefit from the expertise of the EIB Group in evaluating or
“rating” its financial intermediaries.




                                                             22
EIF has an institutional shareholding base that will allow EIB
Group to potentially leverage additional funding through the
JEREMIE initiative. EIB is the EIF‟s principal shareholder,
holding 62% of shares while the European Commission holds
30% of EIF‟s shares.

EIF will act as a federator of all other sources of finance
from other international, national or local financial
institutions, investment funds, micro-credit agencies and
other organisations from both the public and private sector.

Funds will be channelled by EIF to local financial institutions
that will in turn provide financing to SMEs. To achieve this,
EIF will establish an essential cooperation with local financial
intermediaries such as venture capital funds, guarantee
schemes, banks and micro-finance providers as channels for
ERDF funds to reach SMEs. EIF will not provide any direct
financial support to SMEs.

HOW REGIONAL PROGRAMMES WILL BE IDENTIFIED

Member States and the European Commission will prepare the
next generation of operational programmes (Structural Funds
2007 – 2013). These operational programmes will define the
objectives and resources for SME access to finance
initiatives, based on analysis about disparities in the regions.

The EIB Group has set up a JEREMIE task force to help the
European Commission to prepare the analysis about gaps in
the regions of the Member States.

On 1st January 2007, JEREMIE will enter its operational
phase. For each operational programme, two steps are
foreseen:

- Programming authorities will organise a tendering process to
select a fund-holder that will manage JEREMIE (e.g. EIF).

                                                               23
- The fund-holder (e.g. EIF) will open a call for expression of
interest to select financial intermediaries that will channel
JEREMIE funding at local level. Potential financial
 intermediaries include regional venture capital funds, banks,
guarantee schemes, micro-credit providers, technology
transfer organisations, etc..

Authorities managing programmes financed by the Structural
Funds would make use of the JEREMIE facility only if they so
wish, so participation in the JEREMIE initiative will operate
on         a           wholly       voluntary           basis.

EIF will work with national and local authorities to design
each local scheme "à la carte", taking into account and
adapting to local conditions. A funding agreement will be
signed in each case with the programming authority.

EIF will be fully associated to the programming phase and will
carry out evaluations of the local demand for JEREMIE.

ELIGIBILITY CRITERIA FOR SMES

Funding made available through JEREMIE must be used to
provide financing to SMEs making investments in fixed assets
and long-term working capital. This may involve new projects or
the modernisation or expansion of existing businesses within
sectors such as manufacturing, agribusiness, environment,
services, ICT, life sciences, etc..

In addition, the following SME criteria apply:

· Eligible enterprises are SMEs with a maximum of 249
  employees, a maximum annual turnover of EUR 50 million
  and/or a maximum annual balance sheet of EUR 43 million.




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  · Preference should be given to small (< 50 persons; balance
    sheet/annual turnover < EUR 10 million) and micro
    enterprises (< 10 persons; balance sheet/annual turnover <
    EUR 2 million).

  Eligible SMEs must have majority private ownership and
  control, or be in the final stage of the process of privatisation.
  They must not conduct business in the following activities:
  gambling, real estate, banking, insurance or financial
  intermediation and the manufacture, supply or trade in arms,
  or activities on EIF's or EIB's exclusion lists.

  SCHEDULE

  The framework for the JEREMIE initiative is the European
  Commission‟s next budget programming period, 2007-2013.

   2006 – Preparatory phase
Member States and the European Commission, with support from
EIF, will identify the financial engineering needs in their
respective regions for the financial period 2007 - 2013. This
evaluation will form part of an action plan.

  2007            –           Implementation            phase
  On 1st January 2007, the JEREMIE initiative will enter into
  the implementation phase and will become operational.

  Additional information on JEREMIE

  CONTACT EIF

  To request general information on JEREMIE, please send an
  email to jeremie@eif.org

  For specific requests on JEREMIE, please contact:




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European Investment Fund, 43 avenue J.F. Kennedy, L-2968
Luxembourg
Tel.: (352) 42 66 881 Fax: (352) 42 66 88 280 Email:
jeremie@eif.org




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