The European Commission’s proposed guarantee facility for the cultural and creative sectors within the framework of Creative Europe from 2014 has been given a resounding thumbs-up by leading representatives of the banking sector.
Speaking at a workshop in Berlin organised by Germany’s MEDIA Desk and MEDIA Antennae about the guarantee facility, Marc Schublin [pictured], Director of New Products Development at the European Investment Fund (EIF), said: “This is the most interesting scheme I have seen in the last 15 years because it precisely answers the strategic needs of the EU with a very high added-value.”
“We have been developing the concept [for the facility] since 2010 and have been asking 80 banks and associations across Europe what they think of the scheme, and I must say that the answer has been very positive,” he noted.
“An ambitious target would be to have additional bankers active in this sector, but as far as geographical coverage is concerned, we will never be able to organise a guarantee scheme with operations in every 27 EU states,” Schublin added.
Meanwhile, Kristian Kreyes of the Investitionsbank des Landes Brandenburg (ILB) commented: “it is a very useful instrument because of two particular elements: the bottlenecks in capacity building because we just don’t have enough teams in this field, and also the possibilities to share risk and then be able to cashflow projects.”
The proposal also found favour with regional film funder Kirsten Niehuus, co-managing director of Medienboard Berlin-Brandenburg, who commented from the floor: “I think it is a fantastic programme which would be highly appreciated by the film industry because, after the Kirch Group and the financial crises, practically none of the private banks in Germany gave any money to the film or media industries.”
Speaking about the Creative Europe programme as a whole and the chances of realisation for the guarantee facility, MEP Helga Trüpel, who is vice-chair of the Parliament’s Committee on Culture and Education and a member of the Committee on Budgets, pointed out that there is currently “a tough fight” with the so-called net payers in the EU such as the UK, Germany and the Netherlands who want to cut the EU budget for 2014-2020 by 10%.
“If these net payers were successful, the farm lobby will ensure that the Common Agricultural Policy is not cut and the same is more or less for the Structural Funds,” she explained. “That would mean that the other sectors – including culture – would have to suffer.”
She suggested that there was a risk that Commissioner Vassiliou’s proposed 37% increase in funding for the creative and cultural sectors would not be achieved and asked the workshop’s audience whether they would be prepared to accept a cut in the budgets for the MEDIA or Culture strands in order to keep the guarantee facility.
However, MEDIA unit chief Aviva Silver said that despite the present economic difficulties, “we hope within the European Parliament and internally with the fierce negotiations that are going to take place in the European Commission, that we are going to keep to this instrument because I think, in terms of strategy, we need to add this to what we are already doing in the creative and culture industries. We need to focus on financial tools which have not previously been available to some players in these sectors.”
Silver also revealed during the workshop that the Belgian consultancy IDEA consult has been chosen to prepare a study on Access to Finance for the Cultural and Creative Sectors. “We are looking at what are the parameters which would make this guarantee facility attractive to the other cultural sectors and what are the obstacles. So, it is a two-pronged approach: we have the EIF working on the actual market testing and we are working on a topography of the sectors.”
The study will assess the financial gap by sub-sector and country and present results by June 2013 to enable a more precise evaluation of the needs that the financial instrument will need to fulfil.
According to previous analyses, if one assumed that the average loan by a financial intermediary was €100,000, the financial gap for SMEs in the creative and cultural sectors could be estimated at between € 2.8bn-€ 4.8bn in loans.