Jean-Claude Juncker, President of the EU Commission has a plan: the “Juncker Investment Plan”. With the help of leverage effects this means that more that €300bn should have been pumped into the European economy by the end of the project. The plan is slowly starting to work – just not in Austria.
If you look at the statistics surrounding the “Junker Fund” (EFSI) and talk to representatives of the European Investment Bank (EIB) you recognize relatively quickly that although the Austrian public sector has held its hand out for money from the fund, not one Austrian medium-sized enterprise has submitted a project to date. This is although the EFSI accepts a higher level of risk than, for instance, the EIB.
The EFSI aims to supplement the financing tasks carried out by the EIB and the ESIF (EU Structural and Investment Funds). The EFSI is able to compensate for certain regulatory provisions that apply to traditional or standard commercial banks. It is by means of this that the banks will be able to resolve the credit crunch that currently affects medium-sized enterprises.
The main emphasis of the EFSI lies in investing in projects that are under the minimum threshold of €25m set by the European Investment Bank. It is possible for banks to bundle small projects together in consortia or clusters meaning in principle there is no lower level.
Where is Austria’s National Promotional Bank?
The EFSI fund generally works together with EU “National Promotional Banks” (NPBs). The co-operation partner in Austria is the AWS (Austria Wirtschaftsservice) but there is no equivalent in Austria to institutions such as the German KfW (Kreditanstalt für Wiederaufbau). This fact is a growing hindrance for promotion and investment programmes. Austria does not have a bank that focuses exclusively on entrepreneurialism and business start-ups and the associated investment issues within the Austrian economic area. There is currently no central point of contact that provides new businesses with comprehensive information about available promotional funds and that arranges this funding.
One of the first tasks in this connection for the „new“ government could therefore be to “enable“ the business start-up and economic location of Austria, by freeing up as much promotional money and support as possible. This is to be generated in the areas of energy, transport/ infrastructure and ICT.
This will lead to new impulses such as investment in the areas of education and the environment. New jobs will be created and social equilibrium will be one step closer.
This would be an excellent example of the resumption of the social market economy with an ecological aspect. This is a project that could be driven forward because it crosses political divides and is free of ideology. This is exactly why Austria needs a bank for business start-ups – a “National Promotional Bank”.
It should happen quickly. Time is of the essence in this case because the EFSI fund volume is limited to €75bn up to 2018 and a number of member states are submitting projects on an ongoing basis or have already implemented them.