EIB Group President Nadia Calviño explains how Europe can benefit from the Trump chaos, with the tech sector set to receive a massive financial boost.
Interview by Carsten Volkery (originally published in German by Handelsblatt)
The European Investment Bank (EIB) is launching a new initiative to close Europe’s investment gap with the United States, aiming to provide €70 billion in startup funding by 2027. This will encourage private investors to get on board with projects, unlocking as much as €250 billion in investment for the European tech sector.
“This is the largest ever programme to exclusively support European innovation and technological leadership,” EIB Group President Nadia Calviño told Handelsblatt. The goal, she explained, is to finance research projects and companies “from idea to IPO.”
This also includes supporting the exit of company founders and venture capital investors – who often sell their stakes to US investors, who can afford to buy them. In the future, the EIB could help EU firms to acquire promising startups to prevent technologies from being sold out of Europe.
TechEU platform to launch this year
Set to launch later this year, the EIB’s TechEU platform is designed to provide researchers and companies with a one-stop shop for all their financing needs. Calviño says that EU support will become “larger, faster and simpler.” The EIB will work closely with the European Commission, and national promotional banks such as Germany’s KfW may also participate.
The plan still needs to be approved by the Bank’s Board of Governors, which is made up of the finance ministers of the 27 EU Member States. The EIB Group President gave her perspective to a meeting of the finance ministers in Brussels on Tuesday, and hopes for a positive decision in June.
She also sees an opportunity in US President Donald Trump’s erratic economic policy and the uncertainty it has caused. “The current situation in the United States creates an opportunity for Europe to attract talent, to attract investment, to attract capital,” she said. “We see strong interest in Europe from international investors.”
Brain drain warning from US researchers
In recent weeks and months, the US administration has massively cut research funding for institutions such as the elite Harvard and Columbia universities. US researchers are already warning of brain drain as leading scientists leave the country.
Former President of the Massachusetts Institute of Technology (MIT) Leo Rafael Reif wrote in Foreign Affairs magazine that the Trump administration seems intent on destroying one of the United States’ greatest strengths. The recent cuts to university funding, he writes, risk “draining a crucial source of new ideas for industry and the military.”
Calviño emphasised that Europe is a “beacon of stability, clarity and confidence” in the current geopolitical environment. This is what investors are looking for. The EIB is also the only multilateral development bank whose shareholders are the EU Member States. “We are not confronted with the same sort of uncertainties that other multilateral development banks are going through,” she says. This enhances the international role of the EIB.
The EIB’s goal is to back EU policy objectives. It catalyses private investment by offering only partial financing for projects, thereby mobilising public and private sector co-investors. It lent €89 billion last year, and plans to provide €95 billion this year.
Europe’s largest venture capital financier
Beyond guarantees and loans, the EIB also takes equity stakes in companies. It is Europe's largest venture capital financier and its biggest venture debt provider. The various EU funding programmes for researchers and startups will be linked together on the new TechEU platform, meaning that each project will only need to be appraised once.
The EIB’s prominent role in venture capital financing shows just how underdeveloped Europe's private capital markets really are. Calviño says that this new initiative aims to nurture the private venture capital ecosystem in Europe. The hope is that, in time, European startups will no longer be obliged to go to the United States to meet their growth phase capital needs.
However, critics accuse the EIB of being too conservative in its investment approach. In his report on EU competitiveness published last year, EU Special Advisor Mario Draghi called on the Bank to take on more risk to foster breakthrough innovation.
EIB to take on more risk
Calviño says that the EIB has already become more willing to take risks. It intends to continue on that track with the TechEU programme, supporting an extra 1 000 EU champions and innovators every year. At the same time, the EIB must ensure it preserves its AAA credit rating, which enables it to raise funds cheaply on the capital markets. It can then pass these funds on to companies.
Calviño also promises to cut red tape, aiming to return decisions on venture capital financing applications within six months. “This would be a gamechanger.”
The tech sector often complains that response times are too long. In the past, the EIB has always framed its thorough appraisal process as a hallmark of quality, as it keeps loan default rates very low. But it now seems to have been understood that speed is also a critical factor.
Another innovation driver could be the defence sector. The EIB has recently made defence one of its core strategic priorities and now also finances purely military projects. “Security and defence investments can certainly help the technology agenda,” said Calviño.
The Bank already has a pipeline of 22 projects in this sector, supporting drone manufacturers and space companies, for example, as well as several defence-focused venture capital funds.
According to Calviño, Europe already has almost everything it needs to close the technology gap with the United States. “Europe has a very large market, 450 million citizens, excellent universities, excellent research centres and companies, and brilliant startup ecosystems. With deeper and larger capital markets, we can ensure that technologies and startups born in the European Union can be financed and scale up in Europe.”