Finland’s finance minister has said that EU member states should focus on the needs of small and medium sized companies as they mull measures to reinvigorate European capital markets.
Finland is in an important position to drive the direction of new EU legislation, given that it holds the presidency of the Council of the EU until January.
Mika Lintilä, the country’s finance minister, told GlobalMarkets that he thought SMEs should be a “priority” for financial policy in the next legislative term of the European Commission.
“Especially start-ups and small, innovative companies, which often require a mix of debt and equity funding or have limited access to bank funding,” he said.
“In order to contribute to growth in an environment that fosters investment, barriers to cross-border growth for young, small and innovative companies should be eliminated.”
Lintilä’s comments arrive amid a renewed political push towards deepening financial markets in Europe — an initiative referred to as Capital Markets Union under Jean-Claude Juncker’s Commission.
Last week, for example, a high level EU expert group published a report suggesting a series of ways in which member states could move the project into a “new phase”.
The suggestions included numerous measures aimed at helping smaller European companies broaden their access to capital.
Official support
One of the more eye-catching proposals was the suggestion that the EU could set up a fund to support SMEs and mid-cap companies through the costly process of launching an initial public offering.
The new fund could be financed through the structural resources of the EU, through the member states themselves or by the European Investment Bank, according to the expert group’s report.
“Closer and visible co-operation between public and private funding can lead to anchor investors showing willingness to invest,” said the authors of the paper, who were commissioned by the finance ministers of France, Germany and the Netherlands.
The proposal builds on an earlier pledge from Ursula von der Leyen, president-elect at the European Commission.
In her political guidelines for the next European Commission, she said that any EU investment in an IPO fund for SMEs could be matched by commitments from private investors.