Impala Statement: Independent music companies welcome EC proposal for cultural industry fund
The EC is proposing to set up a new fund for cultural and creative industries. It will be part of a new 1.6bn euros 5 year programme called Creative Europe, which will include loan and equity financing instruments to be administered by the European Investment Bank. The new programme would start in 2014. The EC published its proposal last night.
This new financial instrument is expected to help increase lending to music and other cultural companies by guaranteeing loans by national banks. This would address the existing market failure in terms of accessing finance and growth capital. IMPALA estimates that up to 400 million euros could be allocated to loan guarantees and other financial instruments.
Currently lending to the music sector often depends on personal guarantees and collaterals required by the banks. SMEs are restricted in the amounts they can borrow and the types of financial tools available to them. Equity financing is also expected to be covered by the proposed instrument.
Helen Smith, Executive Chair commented: This is great news for the music sector. If we can also couple this with concrete measures to improve market access for SMEs, we can completely transform Europes cultural industries.
The idea of a loan guarantee fund for cultural and creative industries was one of the main points in IMPALAs Action Plan for Finance, a call to decision makers to invest in cultural SMEs and boost Europes economy. This proposal was discussed at IMPALA's finance working group at MIDEM in January 2011. EC Commissioner for Culture Androulla Vassiliou held meetings with sector professionals in May to discuss how financial instruments in the cultural sector might work. She also shared her vision in a recent address to the European Parliament.
The European Commission budget proposal now has to be approved by a unanimous decision of the Member States, after Parliament has given it its consent. IMPALA urges Member States and Members of the European Parliament to support this initiative and calls for the creation of a pilot project for 2012 to test the fund ahead of the new financial framework.
More information: www.impalamusic.org