Commission welcomes €3.2bn Spanish SME agreement

The European Commission has welcomed the signing of a new SME Initiative with Spain. The agreement will unlock more than €3.2bn of additional lending for companies with fewer than 250 employees.

The deal sees regions in the country reallocate €800m of EU funding from European Structural and Investment Funds. Rather than being given as a traditional grant, this pooled money will be channelled through the SME Initiative and used as a guarantee to take first risk in projects. This results in a higher leverage than if the funds were given as traditional grants and will make possible at least an additional €3.2bn and, depending on market take-up, up to €5.3bn for Spanish SMEs. The SME Initiative provides guarantees to financial intermediaries (banks and other financial institutions) and the guarantees cover portfolios of loans extended to eligible SMEs.

Speaking about the agreement, European Commission Vice-President for Jobs, Growth, Investment and Competitiveness, Jyrki Katainen, said: “SMEs from Madrid to Barcelona to Bilbao will have easier access to cheaper loans to support them as they invest and grow. This is great news for the Spanish economy, great news for the European economy and great news for job creation.

“It is exactly what the new Investment Plan for Europe is all about: getting funding to sectors of the economy which need it most. We called on EU member states to use their EU budget money in a more innovative and intelligent way. Now Spain is doing just that with this SME Initiative.”

The SME Initiative complements the new European Fund for Strategic Investments and comes on top of EU programmes such as the Connecting Europe Facility and Horizon 2020.