[By Guancha Observer Network, Liu Chenghui] According to a May 28 Reuters report, the European Commission plans to establish a public-private partnership fund with a scale of at least 10 billion euros (81.4 billion RMB) to support technology companies in achieving scale expansion. This move aims to help the EU narrow the gap with the United States and China in terms of innovation capabilities.

The "Choose Europe: From Start-up to Scaling Up" strategy launched by the European Commission on Wednesday is intended to address the shortage of unicorn enterprises (start-ups valued at over 1 billion USD) in the EU.

The European Commission stated that the main challenges restricting the expansion of start-ups include regulatory fragmentation among the 27 member states, as well as obstacles in financing, markets, talent, and infrastructure.

The report noted that Europe lacks venture capital willing to bet on early-stage projects, while in the later financing stages for companies expanding their markets and preparing for listing, the U.S. funding scale is seven times that of the EU.

The European Commission said that next year it will establish the "European Scaling Fund," which will include public capital, with private capital approximately four times the size of public funds. The fund will invest in promising companies and be operated by private investment managers.

Although the specific scale has not yet been finalized, an EU official said that the fund scale would reach "several tens of billions of euros."

"We don't want this to be just a drop in the bucket; we want it to truly make a significant impact," the official said.

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Reuters reported that consumers' funds in Europe are mostly kept in banks, with bank capital accounting for about 300% of GDP, compared to 85% in the United States.

The EU has planned to guide private savings toward corporate investments through the "Savings and Investment Alliance," which also aims to develop a broader private pension system in the EU region.

The European Commission's strategy also includes simplifying regulations for high-tech start-ups, reducing administrative burdens, enhancing their participation in public procurement, and providing fast-entry channels for non-EU start-up founders.

French President Emmanuel Macron warned last October that a lack of investment and excessive regulation would make the EU less competitive and lag behind the U.S. and China.

"The world has changed," Macron said, noting that both China and the U.S. now surpass the EU in economic output and investment. Unless Europe quickly completes the "banking union" and establishes fairer global trade rules, Europe will be unable to compete with other countries.

"The EU may perish; we are at a very critical moment," he added. If the EU continues to follow traditional agendas in the next two to three years, "it will be eliminated by the market."

In February, during the opening ceremony of the Paris AI Action Summit, Macron said that Europe has fallen behind in technological fields like artificial intelligence and should catch up quickly to close the gap with China and the U.S.

He said that Europe will reduce regulations to make artificial intelligence easier to thrive in the region and urged AI startups to invest in the EU, especially France.

This article is an exclusive contribution from the Guancha Observer Network and cannot be reproduced without permission.

Original source: https://www.toutiao.com/article/7509512453215142463/

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