The commission hopes that by making capital accessible to companies, Europe can help reduce the high level of unemployment affecting the continent. Unlike the US, where a large number of venture capital firms promote and support a number of small high-technology companies, obtaining finance for similar ventures in Europe is exceedingly difficult. Few companies provide venture capital to start-up firms and fewer still understand the risks or rewards associated with high-technology investment.

The six points of the initiative are:

  1. Promote the integration of fragmented venture-capital markets in Europe;
  2. Eliminate institutional and regulatory barriers to the development of venture capital markets;
  3. Ameliorate tax demands concerning venture capital;
  4. Promote the development of small-medium enterprises in the high-tech sector;
  5. Increase the number of entrepreneurs and qualified experts; and
  6. Attack cultural barriers to the creation of enterprise and risk-taking.

The council of Ministers of Finance will discuss the commission's proposals on the 21 April.

The initiative comes at a time when US venture capital funds are looking to Europe for investment opportunities. US venture capitalists also tend to invest more in high-tech companies that their European counterparts. According to Price Waterhouse, total venture capital investments in the US reached $12.8 billion last year, 30 per cent more than 1996, with most of the increase going to high-technology firms. In the UK, $5.2 billion was invested by venture capital funds last year, but only $132 million was invested in early-stage technology companies.