The EU Micro-finance Facility for business start-ups will be funded partly by its "Progress" employment and social solidarity programme and partly by unallocated margins in the EU budget, says a compromise agreement reached by MEPs and the Spanish Presidency on Thursday evening.
The informal compromise, negotiated by Employment and Social Affairs Committee MEPs and the Council of Ministers' Spanish Presidency, still needs to be backed by Parliament as a whole and the Council of Ministers itself.
In December, the Parliament approved the creation a "European Progress Micro-finance Facility" to make it easier for people who have lost or risk losing their jobs to get credit to start up their own businesses. EP amendments on the target groups were accepted by the Council without any changes.
The facility is to make available "micro-credits" (up to €25,000), to people who want loans to start or expand very small firms (10 people or less and a turnover of less than €2 million), but have difficulty in obtaining them on conventional credit markets.
Sources of financing
MEPs agreed to make €100 million available for the facility over four years. However, the Commission had proposed that the Micro-finance Facility be funded from the Progress programme. A majority of MEPs in the Employment and Social Affairs committee did not want these funds to come from the "Progress" employment and social solidarity programme, on the grounds that it too targets the most vulnerable groups of people and taking too much money out of the Progress programme would jeopardise its effectiveness.
According to the compromise, €60 million will come from the Progress programme and €40 million from unallocated margins in the EU budget. For 2010, Parliament and the Council agreed to release €25 million from the EU's 2010 budget.
"This agreement will enable a quick implementation of the facility, which is of particular importance in the context of the social and economic crisis. I call upon the Commission and the Member States to make sure that citizens are properly informed on how to apply to the facility", said rapporteur Kinga GÖNCZ (S&D, HU).
The informal compromise now needs to be endorsed by representatives of the full Council (in the "Coreper" Permanent Representatives Committee), today and by the EP plenary next Thursday.
If approved by both parties, the legislation will enter into force the 20th day following its publication in the EU Official Journal.
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