EU finance ministers welcome proposals for new EIB Group initiatives to deepen Europe’s capital markets, channel savings into productive investments and boost competitiveness

This article is published in association with European Investment Bank.

• Plans discussed with European Finance ministers in Luxembourg will broaden financing options and tools available to scale up European innovative companies and unicorns.
• The instruments to be deployed by the EIB Group include expanding the successful European Tech Champions Initiative Fund-of-Funds, equity and venture capital investments for scale-ups, and a new Exit platform to facilitate purchases and listing of tech start-ups.

European Union Finance ministers have welcomed an Action Plan to be deployed by the European Investment Bank (EIB) Group, to support the development of the Capital Markets Union. The Plan includes measures to untap private savings and channel them into productive investment, to boost innovation, competitiveness, strategic autonomy, and productivity growth in Europe.

The Action Plan was discussed at the meeting of EIB Group President Nadia Calviño with finance ministers at the Eurogroup in Luxembourg today. It was developed after months of intensive engagement with member states and financial markets partners, and received broad support by the Boards of Directors of the EIB and of the European Investment Fund (EIF) last week.

EIB Group President Nadia Calviño, said “The EIB Group is itself already a Capital Markets Union instrument. The Action Plan discussed with ministers will help European innovators scale up their business and contribute to channel savings into productive investments, boost innovation, create jobs and lead Europe toward a more robust growth model, ensuring that European companies born in Europe, stay in Europe”.

The Action Plan covers three main areas:

• Improving market integration for green and digital bonds: The EIB Group will continue to play a leading role in the European green bond market, through issuance and also scaling up bond acquisition.
• Closing the funding gap throughout the company and innovation cycle: The EIB Group plans to scale up support for the EU venture capital and private equity markets to help close the financing gap and to retain the most innovative scale-ups in Europe.
• Mobilizing large-scale investments for EU policy priorities: For instance, working with the Commission on a financing platform for housing.

Today’s meeting has focused on the second area, with proposals to finance the scale-up of European unicorns, including through an extension of the successful European Tech Champions Initiative, scaling up equity and venture debt investments and  a new dedicated fund, an “exit platform”, for financing acquisitions and listing of tech start-ups by European companies.

These proposals will be further discussed and finalised by the EIB’s Board of Directors, in partnership with the Commission. Today’s discussion follows up on the Eurogroup’s mandate in March for the EIB Group to support the integration of European capital markets with new instruments that will further facilitate access to financing for small and medium-sized businesses and innovators.

EU leaders committed, in April 2024, to advancing work without delay toward integrating the Union’s capital markets, while a Savings and Investment Union, including banking and capital markets, is among the flagship goals included in the political guidelines of European Commission president Ursula von der Leyen for the new institutional cycle. Helping develop well-functioning cross border capital markets is among the EIB Group’s core priorities, included in the Strategic Roadmap for 2024-2027, which was unanimously endorsed by EU finance ministers in June.

Capital markets fragmentation has been singled out as a key impediment to European competitiveness by both Enrico Letta and Mario Draghi in their flagship reports. The European Central Bank has repeatedly emphasized that deep and integrated single market for capital is essential for financial stability and for achieving some of the EU’s flagship policy goals, from financing the green and digital transitions to enabling savers to earn higher returns.

The EIB Group is uniquely positioned to support the development of a European Savings and Investments Union, as it is the only truly pan-European financial institution, with operations in every member state and every region of the EU. It has an unparalleled record and expertise in introducing and shaping innovative financing instruments and tools.

The EIB Group has just reached the €100bn milestone of green bond issuance, since pioneering this market back in 2007, and is the largest provider of venture debt in Europe. It offers a full range of products and services, from debt and equity to advisory, to clients ranging from public sector and large corporates to SMEs and innovative startups. The EIB Group has a stellar AAA credit rating, and outstanding Environmental, Social and Governance credentials.

Background information

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment contributing toward EU policy goals. The EIB Group is the largest provider of venture debt in Europe and the largest public investor in European venture capital funds. It is also a major financier of climate investment, with over €100 in cumulative green bond issuances, and is well on track to support €1 trillion in green investment in the critical decade to 2030.

The EIB Group, which also includes the European Investment Fund (EIF), signed a total of €88 billion in new financing for over 900 projects last year. These commitments are expected to mobilise around €320 billion in investment, supporting 400 000 companies and 5.4 million jobs. Over half of the EIB Group’s annual financing supports projects directly contributing to climate change mitigation, adaptation, and a healthier environment. Approximately half of the EIB’s financing within the European Union is directed towards cohesion regions, where per capita income is lower. This underscores the Bank’s commitment to fostering inclusive growth and the convergence of living standards.