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With the Risk Capital Facility, the Commission expects to increase the economic and technological capability of Mediterranean countries to open up their economies towards one another ("south-south co-operation") as well as towards the European Union. In addition, the Facility is intended to improve economic conditions in order to enable each country involved to draw net-gains in terms of accelerated growth, additional and durable job creation and balance-of-payments sustainability.
To achieve these objectives, the facility will support:
competitive restructuring and strengthening of local companies, with priority being given to outward-oriented businesses ;
restructuring of the financial sector in an open market economy context with a view to promoting financially strong, accountable and prudentially healthy financial intermediaries, to enhancing the efficiency of service and financial product diversification, and to developing partnerships with regional and European financial intermediaries that would underpin stronger trade and investment relations ; and
elimination of public monopolies and privatisation of state enterprises where the competitive marketplace can produce goods and services more efficiently.
Background
The "Economic and Financial Partnership" chapter of the Barcelona Process identifies three objectives: firstly, the creation of a Free Trade Area between the EU and the Mediterranean partner countries, secondly, support for economic transition towards a free trade area and thirdly encouraging investment. Small and medium scale enterprises in Mediterranean partner countries face often difficulties in mobilising own funds. This is caused by a poorly developed financial sector that is not very responsive to the needs of small and medium scale enterprises.
The Risk Capital Facility of the MEDA programme reinforces own funds of private enterprises. This is done either through direct operations that reinforce the own funds of enterprises, or indirectly through financial intermediaries. Contributing to the diversification of financial instruments in partner countries is another objective of the risk capital facility.
The risk capital facility is administered by FEMIP, the Euro-Mediterranean Facility for Investment and Partnership, created in 2002 as part of the EIB. Through the risk capital facility, FEMIP provides critical support to the development of the private sector in Mediterranean partners.
The latest €28 million is the third instalment of a €100 million package agreed in 2001. The first instalment of €50 was released in 2001 and the second of €22 million in 2003. The funds are provided through the MEDA programme, the financial and technical co-operation programme of the EU with Mediterranean partner countries.
http://europa.eu.int/comm/external_relations/euromed/index.htm
http://europa.eu.int/comm/europeaid/projects/med/index_en.htm
