On the proposal for a regulation of the European Parliament and of the Council amending Regulations (EU) 2015/1017, (EU) 2021/523, (EU) 2021/695 and (EU) 2021/1153 as regards increasing the efficiency of the EU guarantee under Regulation (EU) 2021/523 and simplifying reporting requirements

Committee on Industry, Research and Energy · Rapporteur: Niels Flemming Hansen

SHORT JUSTIFICATION

The core amendments to the InvestEU omnibus regulation are designed to enhance the programme's effectiveness and align it to current economic and strategic priorities.

Primarily, the revisions aim to improve access to finance for small and medium-sized enterprises (SMEs). A key change is the introduction of a more flexible SME definition, which, under specific conditions, allows enterprises to use a solemn declaration regarding their ownership structure to meet the eligibility criteria. The overarching goal is to simplify procedures and reduce administrative burdens, thereby enabling SMEs, including start-ups and scale-ups, to access capital more efficiently.

Secondly, significant emphasis is placed on reducing bureaucracy and streamlining administrative processes. Reporting requirements, particularly for smaller-scale financing and investment operations (not exceeding EUR 300,000), will be substantially alleviated. This measure is intended to ease the administrative load on final recipients, financial intermediaries, and implementing partners, whilst ensuring that the overall quality of data collection and the capacity for effective programme monitoring and evaluation are maintained.

Finally, the amendments address the European Union's considerable investment needs and evolving strategic priorities. Acknowledging the substantial funding demands in areas such as innovation, the green and digital transitions, and defence, these adjustments are intended to ensure that InvestEU can continue to effectively mobilise necessary private and public capital. This will reinforce the programme's capacity to support the EU's strategic objectives, including the pursuit of greater strategic autonomy and competitiveness within a changing geopolitical context. Furthermore, these changes aim to ensure the continuity of approvals of new operations beyond 2025, responding to significant market demand for the programme.

AMENDMENTS

The Committee on Industry, Research and Energy submits the following to the Committee on Budgets, as the committee responsible:

Amendment 1

Proposal for a regulation

Recital 1

Text proposed by the Commission	Amendment
(1) The Union faces massive financing needs to deliver on its objectives in the areas of innovation, the clean and digital transition, and social investment and skills, while a complex backdrop affecting the Union’s competitiveness and industrial base characterised by changing global dynamics, slow economic growth, accelerated climate change and environmental degradation, technological competition and rising geopolitical tensions needs to be addressed.	(1) The Union faces massive financing needs to deliver on its objectives in the areas of innovation, the clean and digital transition, defence, social investment, and skills. At the same time, a complex backdrop characterised by shifting global dynamics, slow economic growth, accelerated climate change and environmental degradation, technological competition, and rising geopolitical tensions all poses challenges to the Union’s competitiveness and industrial base. This underlines the need for addressing the difficulties small and medium-sized enterprises including start-ups and scale-ups face in accessing capital.

Amendment 2

Proposal for a regulation

Recital 2

Text proposed by the Commission	Amendment
(2) The Draghi report assesses the combined additional investment needs in Europe at EUR 750-800 billion per year by 2030. This includes a substantial amount for the green and digital transition. Ensuring sufficient public and private investment is critical to boost productivity growth and achieve Union’s goals, leverage private investments with the objective to decarbonise industry, accelerate the production, storage and deployment of clean energy and electrification, strengthen interconnections and grids, advance sustainable and circular business models, foster building renovation, develop clean tech manufacturing as well as digital technologies and their diffusion across economic sectors.	(2) The Draghi report assesses the combined additional investment needs in Europe at EUR 750-800 billion per year by 2030. This includes a substantial amount for the green and digital transition. Ensuring sufficient public and private investment is critical to boosting productivity growth, enhancing energy and digital independence, and supporting all effective clean solutions, without favouring specific technologies, towards achieving the Union’s goals. These investment should leverage private funding to decarbonise industry, accelerate the production, storage and deployment of clean energy and electrification, strengthen interconnections and grids, advance sustainable and circular business models, foster energy efficient building renovation and increase the availability of affordable housing, develop clean tech manufacturing as well as digital technologies and their diffusion across economic sectors. In this context, and considering the evolving geopolitical landscape and increased security concerns, enhancing the Union’s autonomy is essential to safeguard economic and political stability.

Amendment 3

Proposal for a regulation

Recital 3

Text proposed by the Commission	Amendment
(3) The InvestEU Fund is the main EU-level tool to leverage public and private funding to support a broad range of Union policy priorities. Through its comprehensive network of implementing partners, including the European Investment Bank (EIB), the European Investment Fund (EIF), other international financial institutions and national promotional banks and institutions, the InvestEU Fund is delivering much-needed financing through its risk-sharing capacity. The InvestEU interim evaluation highlighted that budgetary guarantees are inherently efficient for the EU budget and confirmed that the programme is well on track to mobilise investment, with a notable expected impact on the real economy. However, approvals of financing and investment operation under InvestEU were heavily frontloaded, and as a result, if no action is taken to address the issue, new approvals for some financial products may cease after 2025.	(3) The InvestEU Fund is the main EU-level tool to leverage public and private funding to support a broad range of Union policy priorities. Through its comprehensive network of implementing partners, including the European Investment Bank (EIB), the European Investment Fund (EIF), other international financial institutions and national promotional banks and institutions, the InvestEU Fund is delivering much-needed financing through its risk-sharing capacity. The InvestEU interim evaluation highlighted that budgetary guarantees are inherently efficient for the EU budget and confirmed that the programme is well on track to mobilise investment, with a notable expected impact on the real economy. However, approvals of financing and investment operation under InvestEU were heavily frontloaded, and as a result, if no action is taken to address the issue, new approvals for some financial products may cease after 2025. This performance reflects significant market demand. While simplification efforts are welcomed and desirable, they should be carefully designed and justified, with a view to ensuring that they effectively reduce administrative burdens and enhance accessibility for all enterprises, in particular micro, small, and social enterprises.

Amendment 4

Proposal for a regulation

Recital 7

Text proposed by the Commission	Amendment
(7) In line with an overall objective of simplification so as to alleviate the administrative burden for final recipients, financial intermediaries and implementing partners, reporting requirements, including those relating to key performance and monitoring indicators, should be reduced, where appropriate, in particular those that affect small businesses and small-size operations. The application of the definition of an SME should be adjusted to remove complexities to the extent possible. Specific attention should be paid to social economy enterprises and micro finance institutions.	(7) In line with an overall objective of simplification and the need to alleviate excessive compliance costs for final recipients, financial intermediaries and implementing partners, reporting requirements, including those relating to certain key performance and monitoring indicators, should be reduced, where appropriate, in particular those that affect small businesses and small-size operations. The application of the definition of an SME should be temporarily adjusted for the sole purpose of this legislation to remove unnecessary complexities, introducing greater flexibility in demonstrating SME status while maintaining legal certainty. In this regard, and as noted in Recital 14 of Commission Recommendation 2003/361/EC, enterprises should be permitted to use solemn declarations to certify specific characteristics relevant to SME status, such as the autonomy for its ownership structure. For enterprises already recognised as SMEs, particularly start-ups, under Union or national law, procedures should be straightforward, while ensuring bigger entities do not capture the available funds for SMEs. Efforts to streamline the application process and accelerate disbursement of funds can meaningfully improve the capacity of such enterprises to scale up, innovate, and seize market opportunities, while ensuring that the programme delivers effectively on its objectives. Special consideration should be given to the specific needs of social economy enterprises and microfinance institutions, including the application of proportionate and appropriate due diligence procedures.

Amendment 5

Proposal for a regulation

Recital 11 a (new)

Text proposed by the Commission	Amendment
	(11a) Simplification measures introduced by this Regulation, including the derogations set out in Article 2, point 21, and Article 28, paragraph 2 of Regulation (EU) 2021/523, shall be without prejudice to the negotiations on the post-2027 Multiannual Financial Framework. These measures shall not compromise the quality of data collected from final recipients nor the capacity to effectively monitor and evaluate the Programme’s performance, in particular its contribution to the Union’s climate, energy, and social objectives.

Amendment 6

Proposal for a regulation

Recital 11 b (new)

Text proposed by the Commission	Amendment
	(11b) The final evaluation report under this Regulation should include a thorough assessment of the effectiveness and impact of these derogations, with specific attention to their role in facilitating access to finance for target groups such as SMEs, while upholding the principles of transparency, accountability, and robust performance monitoring that underpin the Programme. This assessment should also enable the European Parliament to fulfil its institutional role in overseeing the use of Union funds and ensuring their alignment with agreed policy objectives.

Amendment 7

Proposal for a regulation

Recital 11 c (new)

Text proposed by the Commission	Amendment
	(11c) With a view to reducing administrative complexity and legal uncertainty, the evaluation should also take into account any regulatory adjustments arising from the projected legislative proposal on a small mid-cap enterprise category. Due attention should be given to the effectiveness of measures aimed at facilitating enterprise development.

Amendment 8

Proposal for a regulation

Article 1 – paragraph 1 – point 2 – point e

Regulation (EU) 2021/523

Article 2 – point 21

Text proposed by the Commission	Amendment
(21) ‘small and medium-sized enterprise’ (‘SME’) means (a) in case of financial products not conferring advantage in State aid terms, an enterprise which, according to its last annual or consolidated accounts, employs an average number of employees during the financial year of less than 250, or (b) in case of other types of financial products, a micro, small or medium-sized enterprise within the meaning of the Annex to Commission Recommendation 2003/361/EC7 or as otherwise defined in the guarantee agreement;;	(21) ‘small and medium-sized enterprise’ (‘SME’) means, for the purpose of this legislation, (a) an enterprise which, according to its last annual or consolidated accounts, employs an average number of employees during the financial year of less than 250, and an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million and where information relating to the autonomy of its ownership structure for the purpose of calculating those thresholds may be made by way of a solemn-declaration by the enterprise or (b) in case of financial products where the applicable State aid rules require the use of the SME definition in Annex I to the Commission Recommendation 2003/361/EC, a micro, small or medium-sized enterprise within the meaning of that Annex I;
__________________	__________________
7 Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (OJ L 124, 20.5.2003, p. 36).	7 Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (OJ L 124, 20.5.2003, p. 36).

Amendment 9

Proposal for a regulation

Article 1 – paragraph 1 – point 20 – point a

Regulation (EU) 2021/523

Article 28 – paragraph 2

Text proposed by the Commission	Amendment
Implementing partners shall be exempt from reporting on key performance and monitoring indicators laid down in Annex III, except those in points 1, 2, 5.2, 6.3 and 7.2, as far as financing or investments operations benefiting final recipients receiving financing or investment supported by the EU guarantee or by the InvestEU financial instrument from an implementing partner or a financial intermediary not exceeding EUR 100 000 are concerned.;	By way of derogation from the previous subparagraph of this paragraph and only until the end of the programming period, implementing partners shall be exempted from reporting on key performance and monitoring indicators laid down in Annex III, except those in points 1, 2, 3.1, 3.2, 3.3, 3.6, 4.1, 5.2, 6.3 and 7.2, as far as financing or investments operations benefiting final recipients receiving financing or investment supported by the EU guarantee or by the InvestEU financial instrument from an implementing partner or a financial intermediary not exceeding EUR 300 000 are concerned.

ANNEX: ENTITIES OR PERSONS FROM WHOM THE RAPPORTEUR FOR OPINION HAS RECEIVED INPUT

Pursuant to Article 8 of Annex I to the Rules of Procedure, the rapporteur for the opinion received input from the following entities or persons in the preparation of the opinion, prior to the adoption thereof in committee:

Entity and/or person
European Comission
European Investment Bank
European Investment Fund
SME United
Bussiness Europe
Danish Chamber of Commerce
Climate Strategy and Partners
Confederation of Danish Industry
Finance Denmark
European Association of Guarantee Institutions (AECM)
Danish Permanent Representation
Danish Ministry for Business
Eurochambres
EuroCommerce

The list above is drawn up under the exclusive responsibility of the rapporteur for the opinion.