The European Commission, the European Investment Bank (EIB) and the European Investment Fund (EIF) have unveiled a new financial package in support of Europe's audiovisual industry designed to strengthen its financial base and to speed up the rate at which it adapts to the challenges of digital technology. Complementing the 2001-2005 Media Plus Programme, the package offers an innovative array of facilities dedicated to turning the industry into a more competitive force and to fostering the development of information and knowledge-based content within Europe's audiovisual media.
At a press conference today in Brussels, Viviane Reding, European Commissioner responsible for Cultural and Audiovisual Affairs, and Philippe Maystadt, President of the European Investment Bank, announced a new strategic initiative in the audiovisual domain bringing together the Commission, the EIB and the EIF. The initiative comes in response to the mandate handed down in Lisbon in March 2000 by the Heads of State or Government of the European Union (EU), underscoring their wish to see the fifteen Member States achieving smooth and rapid progress towards a more information and knowledge-driven economy and society.
Four concrete lines of action were spelled out:
- Provision of EIB credit lines (global loans) to banks specialising in finance for small and medium-sized audiovisual production and technology companies (SMEs) and subcontracted firms. Some of these global loans could serve to supplement State aid for film and television production, while others could include a risk-sharing element and benefit from security structures underpinned, in particular, by the EIF.
- Medium and long-term financing, by the EIB in partnership with the banking sector, of investment undertaken by large private and public-sector television, production and audiovisual distribution groups in their infrastructure (studios, digitalisation facilities, transmitting stations, etc.) and creative activity (production of film "packages", distribution of works and catalogues). Operations under this heading, which could, where suitable, take the form of structured finance with repayment terms partly linked to the success of projects funded, are designed to reduce the sector's industrial shortcomings compared with its global competitors and to promote activities benefiting the numerous SMEs subcontracted by such groups.
- Financing of dedicated audiovisual venture capital funds through EIF equity participations. Acting as a fund of funds, the EIF will thereby extend its activity into a highly specialised sector in which the lack of financial resources and pan-European players is hampering establishment of an effective venture capital market. This innovative approach has found its practical expression in a first operation totalling EUR 50 million signed on 19 December 2000 between the EIF and the tailor-made fund "Venture Capital for Creative Industries" in the presence of Philippe Maystadt and Viviane Reding.
- Joint action by the EIB Group and the European Commission to promote creative activity of a cultural nature and the development of Europe's audiovisual sector, notably the film and television industries. This is designed to ensure that the Group's financial contribution and Community grants under the 5-year EUR 400 million "Media Plus" programme are deployed together to optimum effect.
The EIB's and the EIF's input comes in the form of the "Audiovisual i2i" programme, initially covering three years, an integral part of the "Innovation 2000 Initiative" ("i2i") inaugurated in June 2000 by the EIB Group and designed to underpin the development of a knowledge-based economy driven by innovation. Comprising EUR 12 to 15 billion in loans and EUR 1 billion in venture capital over the next three years, "i2i" represents a qualitative reorientation of EIB Group financing towards cutting-edge sectors characterised by high technological and human value added. The soundness of this approach has been demonstrated in just a few months by the volume of loans already advanced, which, at end-2000, totalled EUR 1.6 billion, or 11% of EIB credit within the Union.
The import of the measures put forward today is both industrial and cultural, inasmuch as the aim is to boost the volume of operations and strengthen the financial stability of both large and small European audiovisual firms, thereby favouring the emergence of a pan-European audiovisual industry. Such steps are vital given that the gap between the United States and Europe in this area is set to widen with the dawn of the new era of digital technology. A further aspect is to promote the creation of new content in a sector which has become a driving force for the spread of European culture.
In his comments, Philippe Maystadt stressed that "it is crucial for Europe to carve itself a leading position in the audiovisual industry. Both cultural and economic arguments militate in favour of offering tailor-made financing to European audiovisual creative artists. This is what we are endeavouring to achieve through the Bank's i2i programme launched following the Lisbon Summit".