The European Parliament is to look at governance issues around the European Innovation Council (EIC), which it believes is having its objectives undermined.
MEP Christian Ehler said to Science Business he was concerned that the EIC was falling short of its objectives.
It wrote: “The EIC is the EU’s first fund to put money directly into risky deep tech companies as part of its EIC Accelerator. It is the policymakers answer to the EU’s failure create an environment in which start-ups can grow and scale-up. The direct equity investments were held to be a great success when they were introduced during the programme’s pilot phase in 2019, but ran into problems at the start of Horizon Europe.”
Adding: “The key problem is that the Commission decided it had neither the time or expertise to manage the fund and delegated it to the European Investment Bank (EIB). That decision was met with a backlash from member states which had negotiated different rules for the EIC, but in February they caved in and allowed the Commission to proceed with transferring management to EIB.”
Since the Commissions handed over the EIC to the EIB, bureaucracy has reportedly stymied the funding of applying companies. Despite this, the EC has continued to trumpet the fund, drawing more companies into applying.
Science Business wrote: “[This week], the Commission announced 61 companies out of 71 in the latest €382m funding round are set to receive equity funding, promising the money will come some time in autumn. In mid-May, following months of delays, Ehler threatened to push for the EIC Accelerator to lose its funding if the Commission did not tackle the problems.”
The difficulties with the EIC have been recurrent news in recent weeks. In May, Science Business reported on the continued hold-ups in start-ups receiving funding.
It wrote then: “The delays are affecting companies selected to receive ‘blended finance’ – a mix of grant and equity funding – following the June cut-off date last year, the first under Horizon Europe. But the impact may soon be felt by those next in line, which were selected for funding following the October cut-off. A week ago companies that applied last year were told in an official letter seen by Science Business that the European Innovation Council and SMEs Executive Agency (EISMEA), the EU agency managing the grant, ‘cannot provide you with a firm date for the signature of your contract’.”
In a recent statement, the EIC said it ‘regrets’ the impact that the delay of funding has had on applicants.
It added: “The delays are the result of the need to restructure the EIC Fund following the provisions of the Horizon Europe legislation and drawing the lessons from the pilot. The Commission is proceeding with the implementation of the necessary changes. This includes negotiations with an external fund manager of the EIC Fund. These negotiations should be concluded by 30 June 2022 at the latest.”