“The best companies deserve to be financed with more favorable and competitive conditions”

Marjut Falkstedt argues that the best companies, "because they are the most capable," "deserve to be financed under the most favorable and competitive conditions possible ." The Executive President of the European Investment Fund (EIF) is in Portugal this Friday to mark Portugal's accession as the seventh EU Member State to the InvestEU Member State Compartment.

Emphasizing her confidence in the “ability to implement financial programs” and “exceed expectations” , Marjut Falkstedt does not want to lift the veil on how this new program will work, reserving the details for the Conversas com Fomento, which will take place this Friday in Santa Maria da Feira and of which ECO is a media partner .

But the Minister of Economy and Cohesion has already revealed details: at stake are 6.5 billion euros of guarantees from the EIF that are leveraged with 500 million national ones – 450 million from the Banco de Fomento and 50 million in guarantees from the Portuguese State.

The contract, to be signed between the EIF and the Portuguese State, "will enable the mobilization of €6.5 billion to support 30,000 companies that will be able to benefit from credit with a European guarantee," Manuel Castro Almeida reported on Sic Notícias . In other words, 50% of the credit the bank grants will have a European guarantee. The commercial bank "only bears risk on the remaining 50%" and thus "will be able to lower the interest rate." Castro Almeida anticipates that "companies currently paying a spread of 1.25% or 1.5% will now pay 0.6% or 0.7%."

"The 6.5 billion euros are mobilized with only 500 million euros ," the minister added. At stake is the implementation of the "national drawer" of the InvestEU Program, which is financed with 450 million euros from the Recovery and Resilience Plan (RRP), to which an additional 50 million euros are added in the form of guarantees from the Portuguese State to the European Union.

The EIF Executive President, in a written interview with ECO, emphasizes that with the launch of the Member State Compartment, she hopes to “ support Portugal in meeting another RRP target , ensuring a faster and more efficient use of European funds” .

Do you believe in Portugal's ability to use the new EIF guarantees, considering the amount of European funds available (PT2030, PRR and others)?

Portugal has consistently demonstrated an enormous capacity to implement highly ambitious financial programs and exceed expectations. Over the past three decades, we have witnessed this competence firsthand, both in the recovery after the financial crisis and in the remarkable performance under the Pan-European Guarantee Facility (EGF) in 2021, under which Portuguese banks mobilized more than €9 billion in financing guaranteed by our products.

We are confident in this experience, which has been proven time and time again, and we believe in the country's ability to implement solutions that benefit its best companies. Not only because they need it, but because they are the most capable and deserve to be financed under the most favorable and competitive conditions possible.

At the European level, are we moving toward excessively debt-based policies? Even to finance the EU budget and the RRF, the possibility of issuing debt to pay off debt is being discussed. Do you consider this approach dangerous?

The European Union must have a diverse financial ecosystem, with different solutions adapted to the objectives and realities of each member state. Our entrepreneurs must have access to a range of instruments , including incentives, guarantees, loans, and capital, so they can choose what best suits their needs.

The EIF offers guarantees that make loans more attractive by reducing interest rates, extending terms, and reducing collateral requirements. We also provide capital solutions through national and European funds specializing in venture capital and private equity that invest in startups and SMEs that are leaders in their sectors.

These instruments complement the offerings of the EIB and national programmes, ensuring a balanced financing offer for the various stages of companies' development.

Are you satisfied with the number of countries that have joined the InvestEU Member State Compartment? Do you consider it a success?

We are very proud to have been chosen as an implementing partner by several European governments. Today we celebrate Portugal's accession as the seventh EU Member State to the InvestEU Member State Compartment .

During the event, we will share more details about this new program, the result of several years of work by our teams and a mutual recognition of the market gap this instrument seeks to fill.

We are grateful for the support of Prime Minister Luís Montenegro, the teams from the Ministries of Finance, Economy, Territorial Cohesion and Agriculture, the Recover Portugal Mission Structure, and the Banco Português de Fomento (BPF), whose knowledge of the national market was fundamental in this process.

What is needed for more countries to join the instrument?

While we are open to welcoming more Member States into the InvestEU Member State Compartment, not all countries face the same challenges. To maximize our impact, we must design instruments tailored to each circumstance , recognizing that there is no one-size-fits-all solution to the challenges faced by all companies and entrepreneurs in the European Union.

In countries where credit plays a more modest role or where other political priorities exist, we have prioritized different instruments. This approach is essential to ensuring the success of our programs, and we are certain that this initiative in Portugal will be no exception.

What is your assessment of BPF's performance?

BPF is one of our shareholders and our closest partner in Portugal . Since its creation in 2020, we have witnessed impressive growth, which is especially evident in the results presented in recent months . Merging multiple institutions is never easy, and BPF appears to have succeeded in building a coherent strategy that is already bearing fruit.

We are proud to collaborate with BPF on several fronts, not only operational but also in terms of supported capacity building. Our recent knowledge-sharing program, developed with the support of the European Investment Bank's advisory team, involved more than a dozen EIF experts in sessions with BPF teams, promoting the exchange of best practices regarding products and processes.

National Promotional Institutions and Sovereign Banks, such as the BPF, are essential for bridging market gaps, supporting companies in accessing more competitive financing . Their cooperation with the EIB Group has helped ensure that European Union policies have a greater real impact on the ground.

The National Monitoring Committee for the PRR states that the BPF is prioritizing treasury solutions (debt) over corporate capitalization. Do you agree?

We prefer not to comment on the strategic choices of other institutions . However, we understand that the BPF currently manages €850 million of the RRP focused on capital instruments. This is a significant amount , and its implementation appears to be accelerating , in line with the RRP's deadlines .

The EIF also manages several equity funds invested by the BPF itself and the Portuguese Government, namely the Fomento Portugal Tech, Growth and Blue programs, which have been fundamental in strengthening the venture capital and private equity ecosystem in Portugal.

These programs are relatively new, but they're already showing impressive results and are freeing up resources for us to make new joint investments . In this context, we hope to soon announce a new commitment with a national fund manager, a first high-quality team that will invest in high-potential SMEs.

We believe that the country currently has a comprehensive set of instruments to support its economic growth trajectory . With the launch of the Member State Compartment , we hope to support Portugal in meeting another RRP target , ensuring faster and more efficient use of European funds .