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European Investment Bank to inject €70B in European tech

307 points by saubeidl 1y ago

jaoane 1y ago
> Drawing on the current geopolitical landscape, Calviño sees the uncertainty generated by US President Donald Trump's economic policies as an opportunity for Europe. The opportunity of wasting the hard earned money of the citizens she means. Have they considered doing useful stuff like removing regulations, lowering taxes, fixing the immigration mess, etc? You know, what actually made America an innovation hub. This will end the same way it always does every time the EU gives away money to economic sectors they are jealous that the US have and they don’t: a select few will fill their pockets with nothing to show for it.
- sillystu04 1y ago
  That’s never been the European way of doing things. You can’t beat America at being America. From the East India Companies to Airbus, strong European companies have been made around strong European states.
  - bboygravity 1y ago
    Bad example. The East India company era had WAY less regulation all around, way lower taxes, less types of taxes, a very attractive simple investment climate (the literal founding of the concept "stock market", in its simplest and most primitive form) and close to 0 (illegal) immigration. They also had no euro, no socialist EU and no self-imposed limitations on energy conversion (there was no electricity, but wind was huge and allowed for mass production of stuff).
    - sillystu04 1y ago
      When companies were operated by royal charter and owned by aristocrats there wasn’t much meaningful distinction between dividends and taxation. > They also had no euro, no socialist EU and no self-imposed limitations on energy conversion (there was no electricity, but wind was huge and allowed for mass production of stuff). These are the diseases of weak states, incapable of creating state ownership enterprises that could dominate the world.
  - spwa4 1y ago
    You should ask Isaac Newton (yep, that one) about these strong European companies: https://royalsocietypublishing.org/doi/10.1098/rsnr.2018.0018 https://royalsocietypublishing.org/doi/10.1098/rsnr.2018.001... Btw: the East India trading company is still used in economics schools as an example of state interference in trade and what can go terribly wrong.
- closewith 1y ago
  > You know, what actually made America an innovation hub. An innovation hub or a capitalistic, fascistic hellscape about to collapse into itself? > This will end the same way it always does every time the EU gives away money to economic sectors they are jealous that the US have and they don’t: I think you are so far down the propaganda rabbit hole that you can't see the reality. Europeans do not want the US oligarchy. This move is to try to distance the bloc from the failed experiment that is the States.
  - missinglugnut 1y ago
    In what reality is giving politicians a fund to pick winners and losers in the economy going to prevent fascism? The tech sector in the "fascist hellscape" is paying its workers 3-4x what Europe is, and Europe is doubling down on the policies that got it there. >I think you are so far down the propaganda rabbit hole that you can't see the reality You built your whole argument on a future collapse you've imagined for across the pond, rather than engaging with the topic at hand. You are the one who refuses to see.
    - closewith 1y ago
      > The tech sector in the "fascist hellscape" is paying its workers 3-4x what Europe is, and Europe is doubling down on the policies that got it there The absurd income inequality in the US tech sector is not the boast you think it is. > You built your whole argument on a future collapse you've imagined for across the pond, rather than engaging with the topic at hand. The collapse of US society has already occurred.
alecco 1y ago
Great idea and I think they should 10x it, but... the person in charge according to the article is EIB President Nadia Calviño. She is a Spanish career politician and a socialist lawyer with background in media and broadcasting. They rarely put in charge experienced people or at least engineers. It's so sad to see the EU crumble due to a cast of career bureaucrats squeezing it to its last drop. There are so many great universities and researchers to build things.
- FirmwareBurner 1y ago
  >They rarely put in charge experienced people or at least engineers. Because most of the time, the point of such government "investments" is to be another hidden wealth transfer from the taxpayers into the pockets of those with government connections (your Siemens, T-Systems, Capgemini, Thales, etc). That's a feature, not a bug. Imagine Dell, Zuck, Jobs, Page and Brin back in the day, waiting for handouts form the US government to fund their companies, instead of VCs. None of their companies would exist today. Governments are only good at funding infrastructure, education, healthcare and defense projects, you can't rely on them to build you the consumer focused private tech industry the US VC industry did. It's not something achieved through central planning, and the EU refuses to get that, so it keeps throwing money into the "maybe it'll work this time" bonfire.
  - StopDisinfo910 1y ago
    > Imagine Steve Jobs, Larry Page and Sergey Brinn back in the day, waiting for handouts form the US government instead of VCs. The US hands out money extremely generously through federal grants, DARPA and orders which have to be made to American companies through things like the Buy American Act. Silicon Valley itself was spurred by the DoD spendings.
    - FirmwareBurner 1y ago
      >The US hands out money extremely generously through federal grants, DARPA and orders which have to be made to American companies through things like the Buy American Act. You're ignoring my point or arguing in bad faith, since I already addressed this to the comment you're replying to. The EU also spent a lot into defense and R&D, the difference is the US gov didn't spend money in the start-up consumer market, but they let private entrepreneurs commercialize some of the solutions that trickled down from the defense tech into the consumer sector to make money (CPUs, 3D graphics, radios, etc). This is where the EU is deficient and you can't fill this entrepreneurial visionary void with government bureaucrats shoveling taxpayer money around to their friends. What did DARPA have to do with Apple's success in the music and phones business? What DARPA money went into the iPod or the iPhone? They were made with commercial off the shelf chips that the likes of Nokia and Ericsson also had access to, not some super secret US DoD tech. Just like many SV companies, Philipps, Ericsson and Nokia also were government founded from selling radars and radios to the military initially before the tech trickled to consumer. Yet Apple is now a multi trillion company(that was nearly bankrupt in the 90s) and the EU phone companies have withered away. Why is that? Is it because of "DARPA and the government"?
FaridIO 1y ago
The folks who allowed the continent to fall behind through over-regulation would like you to know they'll now do a good job at being the capital allocators.
- closewith 1y ago
  The continent is well ahead in health, quality of life, justice and society, partly due to regulation.
  - whatnow37373 1y ago
    Those are all irrelevant. The market will magically fix everything, don’t you know that?
    - j7ake 1y ago
      It’s funny because there are people in USA who actually believe health and quality of life are irrelevant because they’re not measured by GDP.
  - kasey_junk 1y ago
    I think the concern is the fiscal ability for eu nations to continue to pay for the things that help it stay high on those metrics, especially without innovation. The productivity numbers for the eu are dreadful so something needs to change.
    - TheOtherHobbes 1y ago
      The distribution of productivity gains in the US is beyond dreadful, so something needs to change. Besides, it's screamingly obvious the US has literally chosen to pivot back to the Middle Ages, so even these captured productivity differences won't be an issue for much longer.
      - graemep 1y ago
        How is the US anything like the Middle Ages? You did say literally so can you do a point by point comparison? We have other people claiming the US is fascist and one of the aims of fascism was to take European culture and religion back to before the Middle Ages - they wanted to emulate the Roman Empire.
qoez 1y ago
Imagine if AI does become so powerful UBI is a necessity. How would europe be able to pay for UBI without money coming in and taxes being paid to fund it? Things like this seem critical for the future of the EU and yet I'm super sceptical this will lead to openai etc level quality.
- JumpCrisscross 1y ago
  > Things like this seem critical for the future of the EU Solving faraway hypotheticals in lieu of actual problems is half of the EU’s problem.
- wesselbindt 1y ago
  At what point would AI necessitate UBI? I'm assuming your idea here is, roughly speaking, that at some point, AI will displace a large section of the work force, rendering them homeless and unable to feed themselves, and that to prevent this, UBI would become necessary. But don't we already have homeless folks? Haven't we already been through technological revolutions putting people out on the streets? If this historical precedent is anything to go by, the politically dominant class is perfectly content with people going homeless on account of not being able to find a job. Seems to me that the classical solutions of pumping drugs into the streets, immobilizing the downtrodden, and straight up slavery through the prison system, are much more likely to happen than UBI
  - dudefeliciano 1y ago
    if enough workers are displaced due to this, and they do not receive some form of income, the politically dominant class will be in danger
    - qoez 1y ago
      Or they make money the way B2B companies do; which seems like companies just shifting money around on the upper layers without it ever really reaching the hands of lower classes.
    - wesselbindt 1y ago
jarym 1y ago
investment is one piece of the puzzle - but you need talent, reasonable cost of living, and a fiscal climate that rewards success instead of sucking any sliver of it with onerous taxes. All those factors of course vary throughout the EU but it would be nice if they took a more holistic approach to supporting tech ventures.
- deleted 1y ago
  [deleted]
- JumpCrisscross 1y ago
  > All those factors of course vary throughout the EU but it would be nice if they took a more holistic approach to supporting tech ventures All of those things can be bought. One of Europe’s strategic disadvantages vis-à-vis America and China is low availability of big, risk-taking cheque writers. Fixing that today is worth more than a working group to write a paper about a holistic solution in ten years.
- pornel 1y ago
  The US is adopting isolationist policies based on a nationalist ideology. The government is run by anti-intellectuals. The US economic policy is based on xitter rants, and flip-flops every week. The fickle vindictive ruler is personally attacking businesses that don't make him look good. It's clear that in the US the path to success is now loyalty. The president runs a memecoin. The EU is getting ready to brain-drain the US.
  - underdown 1y ago
    I make 4x in the US what I’d make in Germany.
  - ExoticPearTree 1y ago
    > The EU is getting ready to brain-drain the US. It is not going to happen, this is just day-dreaming. Yes, I saw the news, but you can't compare a few tens of people wanting to leave the US for ideological reasons to millions of people that stay in the US because they can fare better and make more money or start new companies overnight because they have a great idea.
pknomad 1y ago
Good for EU for trying to improve tech market, but I recall seeing another thread here at HN why it can't be solved by simply throwing money at it.
StrauXX 1y ago
It's really tiring to see the same handful of arguments on HN every time anything related to Europe or the EU is posted on here. Yes, some things the USA is doing better than Europe, but far from everything and depending on your political leanings (or rather social position) even most.
- chermi 1y ago
  [flagged]
  - newsclues 1y ago
    Seems comparison makes certain regions look good or bad, and that could lead to accountability which would be good or bad depending upon how you benefit or not from the policy. That’s part of the problem with globalists who want a single world government, one government for the world deprives the people of choice.
  - miltonlost 1y ago
    How many of the top level comments are just blanket assumptions that this is going to be corrupt without any pointing at specifics of this proposal? The knee-jerk reactions are strong
    - FirmwareBurner 1y ago
      >How many of the top level comments are just blanket assumptions that this is going to be corrupt without any pointing at specifics of this proposal? How many points do you need on the graph till you're convinced they form a line? If some person or some org, has a history of spending money and not delivering anything, what are the odds "this time will be different"? To me, this initiative is just another point on that line.
    - sowhat25 1y ago
      Because it's their experience with how the EU is run. These top level commenters you refer to don't want to waste their time with the specifics is the proposal because they believe that these initiative is a poorly managed redistribution of tax money.
landl0rd 1y ago
Calviño is the wrong choice to lead this. Why not tap a few people from Mistral if they care about AI? Spotify if they care about more generic tech? Funding will not fix the fact that euro salaries are not even remotely competitive especially after tax. Maybe it’s better to be poor in europe than America but MLEs at large AI labs and bigtech SWEs are definitively not. Plus, capital is somehow still more risk-averse in the EU despite the ECB's policy rate consistently running >200bps lower than fed funds. And of course the process of getting funds from the EIB remains agonizing even with this change.
- JumpCrisscross 1y ago
  > Calviño is the wrong choice to lead this Will Calviño be picking and choosing the grantees?
  - landl0rd 1y ago
    This isn't the point. More knowledgeable people at lower levels can help. But when leadership lacks domain expertise it's very hard to know what to do or not do, what will help and won't. She could be smart and lean heavily on industry experts but that still makes her the wrong choice to lead it when one of them could have done so better. This is the equivalent of private equity installing someone who knows nothing but MBA material at a biotech company or a ML research company or anything else where domain expertise can actually help. The EU is actually better at bringing in bits of "technocracy" to let industry experts lend their expertise. I don't know why they are doing that here. I think it's the wrong call.
    - amarcheschi 1y ago
      Elon Musk lacks domain expertise given how he asked to rewrite Twitter stack to the devs after it was bought If you're talking about the domain of startups and companies themselves though, I'll give you that
      - robertlagrant 1y ago
JumpCrisscross 1y ago
“The bank aims to process startup financing applications within six months, significantly improving from the current 18-month timespan.” Oof. The right way to do this would have been to match private financing so the EIB is providing capital but not gatekeeping. (That or commit to giving the first N companies to reach some milestone a bunch of cheap capital.)
- RobRivera 1y ago
  Matching private funding brings the decision making lever to private funders, creating a mechanism to extract tax dollars with minimal government discretion and would be a process ripe for abuse by those with significant capital. One person's gatekeeping is another person's stewardship and due diligence
  - newsclues 1y ago
    Governments would never deploy capital in ways that are stupid, corrupt or gatekeeping. One person’s stewardship and due diligence is another’s person’s definition of fraud wealth transfer and crime.
    - TheOtherHobbes 1y ago
      Nor would VCs, obvs. How long does it take to get a Series A round, and how many bureaucratic hoops do petitioners have to jump through?
      - newsclues 1y ago
        Easier for government to collect more taxes than it is for VCs to raise more after either fail and go broke.
    - exe34 1y ago
      > One person’s stewardship and due diligence is another’s person’s definition of fraud wealth transfer and crime. Yes, that why you then buy the government and fire everybody who's investigating your many crimes. Much easier that way.
evanjrowley 1y ago
When it comes to European tech funding, I'm a big fan of NL Net's Next Generation Internet (NGI) grants[0]. These grants the only kind of investment I care about and the only kind I want to see. My opinion towards this is influenced by the enshittification[1] that has unfortunately been embraced by large tech companies and financial powers in the United States. Overall I'm not confident this is actually good news, but the fact that the financing is also available to researchers seems like a possible silver lining. [0] https://nlnet.nl/commonsfund/ https://nlnet.nl/commonsfund/ [1] https://en.wikipedia.org/wiki/Enshittification https://en.wikipedia.org/wiki/Enshittification
- therebase 1y ago
  I can totally second that. I have just stumbled over a project that was developed as part of that fund. Super minimal probably the funding and obviously only a start, but this has a 'dutch flair' of being practical, usable etc. As always: please send people to teach the germans about how to build things (2 extra cookies if you teach us how to *Railway*) I do think the way to success for EU is to start with this little elements. Maybe EU cloud infra later relies on one little OS component that is still maintained by 3 people - not one ;). If we invest our time in something else than cloning hyperscalers - maybe there is a silver lining in form of a technological jump on the horizon. What about a Eurocloud that is a distributed system and not a 'monolith by monopoly'. The Systems we replace are not cheap, so there is even money on the table. Building EU hyperscalers just would suck OS projects dry of their 'IP' and siff money to a account on the caimans or UAE somewhere. Not building them is the way. Maybe not make this a 'bring US startup culture to europe' thing as well? It leads to monopolies and a lot of 'loosers'. Not a super efficient way to build what in fact is infrastructure.
huqedato 1y ago
From a person who has dealt with the management of European research projects: these funds will go through the EU bureaucratic maze, don't even think they will be available directly to startups. There will probably be programs and sub-programs, projects and other craps like that to more difficult for people to access the money. It's how the EU works. That's why startups flee to US if they want serious financing. So leave me be very skeptical about this news.
- huqedato 1y ago
  PS: I really don't understand the downvotes to my post. I've just expressed my (educated and objective) warning.
  - dudefeliciano 1y ago
    Please don't comment about the voting on comments. It never does any good, and it makes boring reading.
    - Chris2048 1y ago
      I love reading comments about the voting on comments; On the otherhand I find comments on what comments induviduals find "boring" to be tedious.
      - detaro 1y ago
        It's a quote from the site rules.
        Chris2048 1y ago
        Actually, it's a quote from the comment I responded to. It, in turn, appears to be a promotion of one of the site guidelines. In turn I would promote the official guideline: "On-Topic: Anything that good hackers would find interesting" as well as the not-official personal guideline: "Guideline-lawering is boring, and uninteresting to any good hacker, or true codesman."
bjornsing 1y ago
These initiatives always end up the same way: bureaucrats distributing taxpayer money to the socially focused careerists at the top of large companies and academic institutions (perhaps after they’ve left and founded a startup). It’s just so engrained in the European way of thinking that you need to ”be someone”, not ”understand something” or ”be able to do something”. It’s sad, but that’s how it is.
- JumpCrisscross 1y ago
  > These initiatives always end up the same way By “these” do you mean anything European, or something specific to this structure?
  - bjornsing 1y ago
    I was primarily referring to EU initiatives. But the national ”innovation system” here in Sweden is pretty much the same. It’s a cultural issue, not an organizational one, IMHO.
  - bgnn 1y ago
    EU government funds are also similar.
- deleted 1y ago
  [deleted]
- bgnn 1y ago
  Very nicely put! I have been in discussions with these type of people, several times, to start a company in semiconductors and quantum computing. I was often the only one who can "do" things and it was not appreciated. Academics didn't have the time or will to start a company (and had no industry experience), but wanted to have more than 50% of the shares because the government or EU gave the money to them, in return the university wanted 30% cut because they bring "a prestigious name", bug companies forced on you by EU funds did't want shares but they wanted control (board seat) and IP rights. All these were for <500k seed fund which would barely cover couple of engineers salary for a year!
christkv 1y ago
This will be a transfer of money to existing big corp on BS projects that go nowhere. How about they just use the money as a cheap credit pool for VC's one a 1:1 match for private investments and maybe they can even make money from this. The person in charge is not fit to run a small coffee shop much less a 70B fund.
dachworker 1y ago
[flagged]
- landryraccoon 1y ago
  Can you be more specific? Which politician is using this fund in a corrupt fashion, to help which friend? Please provide names. Or are you simply expressing the same meaningless general cynicism that is so predictably and boringly parroted whenever any government tries to do anything?
  - 77pt77 1y ago
    Only names? Is it even valid unless it's full names, dates of birth, addresses, bank account numbers, receipts and notarized video evidence where they explicitly admit to being corrupt?
  - carlosjobim 1y ago
    If you assume that the previous poster is right and do a casual web search for corruption with EU fudns, will you find anything? It is so prevalent that your question makes as much sense as demanding the names of soldiers killed in the Ukraine war to believe the war is real.
  - hulitu 1y ago
    > Can you be more specific? See the last wave of arrests in Brussels. (some defence lobby - they wouldn't touch the politicians).
littlestymaar 1y ago
I don't understand why people in the comment seem to obsess with “bureaucracy” and “taxpayers money”. The EIB is, as the name says: a bank. It has some strategic targeting running, but the way it works is through making loans. The EIB is making profits with its investment activity!
- mleonhard 1y ago
  EIB has EUR 500B of capital, invests about 80B/year, and makes about 2B/year profit [0]. European states buy EIB bonds which pay interest [1]. This new 70B will come from bonds sold to EU member states. The states need to approve purchasing the bonds. EIB earns about 3% profit. Private banks earn about twice that [2]. EIB is a non-profit organization. EIB makes about 10% of its loans outside of the EU. [0] https://www.eib.org/attachments/lucalli/20240237_070525_financial_report_2024_en.pdf https://www.eib.org/attachments/lucalli/20240237_070525_fina... [1] https://en.wikipedia.org/wiki/European_Investment_Bank#Funding_sources https://en.wikipedia.org/wiki/European_Investment_Bank#Fundi... [2] https://www.bankingsupervision.europa.eu/press/speeches/date/2024/html/ssm.sp241016~c532e5246d.en.html https://www.bankingsupervision.europa.eu/press/speeches/date...
- carlosjobim 1y ago
  The banks are a part of the government in the economic zone where they operate, or you could also say that the government is a part of the banks – since the banks have the strictly political privilege to conjure money. And bureaucracy is not limited to government offices.
fear91 1y ago
Why not finance a more wide tax break for tech companies, including small companies? I have seen first hand, one of my classmates from high-school, whom I didn't consider to be too bright, receive a 100k EUR grant to build an esports platform that ended up being a styled-up wordpress blog. He had zero interest in tech, never programmed, the works... He had no interest nor knowledge relating to tech, but managed to somehow get that grant. Meanwhile, I was paying taxes on hard earned freelancing dev money. We were both 23 years old at the time and it was really jarring. I'd rather they cut taxes for already profitable small companies. The taxes in EU are astronomic.
- bjornsing 1y ago
  I could not agree more. But the problem is: then the politicians / bureaucrats don’t get to decide who gets the money.
- Canada 1y ago
  > Why not finance a more wide tax break for tech companies, including small companies? Because then these communists wouldn't get to choose who gets the money.
- constantcrying 1y ago
  Can the EU directly regulate the details of the tax regulations of their member states? That would be extremely surprising to me and, even if done, would likely be seen as a sever overreach.
- enaaem 1y ago
  Tax breaks is not going to do much, because that is not where the real problem is. Imo EU is being underestimated. The EU is really competitive at boring high tech that bootstrap themselves like cars, civilian air planes and tooling, so the business and innovation climate is not bad. What's different from the EU and US is that the US has single capital market with more unified regulations where it is much easier to pool infinite VC money into an idea. Contrary to popular belief it's actually the LACK of EU regulations that makes the EU less competitive, because a company has to deal with 20+ regulatory bodies. In short, the EU should focus on more market integration.
option 1y ago
I wonder what percentage of that money would be spent on just complying with various regulations. Then it would be interesting to see this % comparison with US and China. Could be strongly correlated with ROI.
deleted 1y ago
[deleted]
sharpshadow 1y ago
As with Germany’s 1€ trillion new credit, of which half goes to the military, so will the EIB ‘inject’ more than half of it into the military. Large established tech companies will get a big part and quantum startups will see their expected cash flow. Good timing for those quantum start ups which have been popping up through the whole EU recently.
- nickserv 1y ago
  Investing in the military seems like a necessity given what's going on. One madman to the east was bad enough, now there's another to the west. The Ukrainians have done some pretty incredible stuff with very basic tools and lots of ingenuity.
bitlad 1y ago
Given that all startups work 32 hours per week. Thats alot of money to spend.
Workaccount2 1y ago
Europe is going to have a hang-over from resting on it's laurels for the past 20-30 years. I don't know if people will be able to tolerate the changes needed to totally stand independent. If Europe wants to copy the powerhouse tech industry of the US, it's going to have to become more like the US.
- koonsolo 1y ago
  It's very hard to copy Silicon Valley, even other US regions are not able to do it.
  - ExoticPearTree 1y ago
    There's something magical about California and New York (another tech powerhouse). NYC has this vibe of "getting stuff sone, no BS" kind of mindset. California has this relaxed vibe but at the same time the sky is the limit. I think it has something to do with how the sun shines there and the ocean. You feel like just working and things are going to be OK. I am always more productive in NYC or LA. And I have no real explanation for that.
    - dustingetz 1y ago
      NYC and SF have private capital concentrated in enormous quantity. Look to the preceding 5 decades to see how that happened, it did not spring up overnight.
- lyu07282 1y ago
  I don't think becoming even more neoliberal is going to solve anything for the EU, you people know one button so you all you ever want to do is press it harder to solve any problem, it's hilarious.
- nickserv 1y ago
  You mean the Euro should become the world's reserve currency?
scrollaway 1y ago
If anyone is in the US and interested in coming over to Europe to build a startup… I started an incubator specifically for US based entrepreneurs looking to make the leap from what is, right now, an incredibly unstable place to build, and assist in getting both private and public funding for you, and take care of all the admin and immigration paperwork. Come to Brussels, Belgium. It’s the most international city in the world per capita, English friendly, welcoming to expats and there’s 0% capital gains tax. It’s also human sized, you don’t need a car to get around. https://sevenseed.eu/program https://sevenseed.eu/program Shoot me an email if you’re interested. This program was birthed right here on HN in a Who’s hiring thread. I’ve talked to 50+ founders who have had enough of the current admin and want change.
ayushrodrigues 1y ago
I was happy to read this as a founder who was raised in the UK. I wish I didn't have to move to the US to start a company but it's starting to feel like a joke here. > The bank aims to process startup financing applications within six months No good founder is waiting for 6 months. It makes absolutely no sense when VCs can make decisions in days, hours even.
- alephnerd 1y ago
  > I was happy to read this as a founder who was raised in the UK The UK isn't a member of the EIB. > No good founder is waiting for 6 months. It makes absolutely no sense when VCs can make decisions in days, hours even. Speculation, but based on similar initiatives done in the EU in the past, it will target industrial and manufacturing vendors and suppliers (especially as this proposal is linked to KfW). That said, no point discussing this until the final proposal actually gets presented and voted on by the Board of Governors. Most of what exists publicly is just vague press releases.
  - ayushrodrigues 1y ago
    True, but the EU startup ecosystem is small and shared. Only so many places to raise capital from.
    - alephnerd 1y ago
      Yep! But the overlap between the UK and EU ecosystem would be dwarfed by the overlap of the US-UK ecosystem. So long as the EU doesn't have their own equivalent of Index Ventures, I'm not sure an EIB style industrial policy program would have significant impact on the British startup scene.
- cheeseface 1y ago
  Most startups will use funds like in addition to VC funding. It allows you to increase your runway so you’re better positioned for your next funding round.
owenversteeg 1y ago
There is a lot of discussion here trashing EU programs for startups and not a lot of specific details, which is disappointing. I will try to provide a more substantive critique. My personal experience, having been involved with many startups in both the EU and US, is that EU government funding is completely useless for almost all startups. Why? First of all, you have to be part of the existing networks. If your business does not have university affiliations with people that get existing grants, or connections to EU bureaucracy, then you can forget about getting a dime. Then there is the risk aspect: if you are doing anything even remotely novel, or with any amount of risk, forget about it. This is not just my opinion, Mario Draghi, previous president of the ECB and Italian PM, said that the EU does not take enough risk to produce real innovation. And finally there's the timelines: from researching funding to cash in your bank account is always measured in years. So, my expectation is that these funds will be distributed to members of the bureaucratic class and their network, for low-risk, low-reward projects, on a timescale too slow for most startups. I hope to be proven wrong, but the results of previous decades of EU funding programs do not make me optimistic.
- NooneAtAll3 1y ago
  ...so it's corruption with extra steps?
  - ithkuil 1y ago
    It's a weird kind of corruption where the most diligent and patient and boring wins
  - arlort 1y ago
    No, it's the result of the public's/politicians' pathologic risk aversion and swiftness in calling everything corruption Since it'd be obviously bad (sarcasm) if public money were spent on projects that deliver nothing or the people receiving them used them for anything other than the narrowest interpretation of the goal then you absolutely (sarcasm^2) have to have 50 different layers of checks and plans and assessment to make sure the little money is spent on the entities that lie the best. But at least no opposition politician can complain someone bought a fancier watch than they'd like or didn't deliver enough Anyway the EIB is a different kind of funding process than EU grants and should be more effective (even just because capital doesn't come out of the EU budget or member states directly), though how much I don't know
constantcrying 1y ago
The US has a start-up culture heavily centered around venture capitalist investments. The EU is currently trying to be the venture capitalist and to create a European start-up culture where none was before. I think this is a terrible idea, because it does not address why there is no European startup culture. Europe has tech talent and Europe has money, yet it has no start-up culture. There are many reasons for this. To me the most important ones are: - Many EU member states have very start-up hostile labor laws. In Germany many tactics/offerings US startups use to hire talent are illegal. - The wage difference between hard work at a startup, less hard work at a large corporation and very low stress work in a government office is minimal. Working for a startup is almost never financially rewarding. - The mainstream social democrat conception of work, which much of the population shares, is totally at odds with American start-up culture. Money does not solve any of these problems, because it does not answer the single most important question. Who is going to do anything with this, that is actually worthwhile. I have seen dozens of these EU funded projects and as a tech enthusiast I think many of them are exciting and cool and fun and interesting. The number of actual useful products I have seen is at zero.
sylware 1y ago
You mean ultra performant RISC-V 64bits microarchitecture CPU at 18A manufactured in EU?
donperignon 1y ago
From my personal experience this funds most of the time end up being absorbed by big corporations that had the contacts and the bureaucratic muscle. So basically it's throwing away 70B euros of citizen taxes.
- _zamorano_ 1y ago
  Exactly this. Imagine the slowest consultant firms, with the most powerpointists, huge hourly rates for very simple projects that pay peanuts for the not so bright devs... These are the companies with the connections that are getting the money.
nish1500 1y ago
I am in the process of moving my startup from Canada to Germany. I started in India, so I have experience running a bootstrapped business on three continents. I am not looking for funding, and in fact use the business profits to invest in other companies. Dealing with German bureaucracy is the hardest thing I have done in my life, perhaps second only to bootstrapping my business. Bureaucracy isn't a side effect of poor planning; it's tool to control individual liberties and capital, without going full communist. For the first time, I am considering selling my business. I want Europe to succeed, but I see no way how. Any little faith I have in EU actually resides in a handful of underdogs like Estonia and Poland. Most of that €70B is going in the pockets of bureaucrats and consultants, assuming any startup sees a dime within 3 years.
- akreal 1y ago
  What is the motivation to move startup from Canada to Germany, if I may ask?
maelito 1y ago
As someone working on a project funded partly by the EU : there was no bureaucracy or very few. It's great.
- DoingIsLearning 1y ago
  Can you share what vehicle you used for funding? My experience is that we had to hire consultants from big corp consultancy firms just to guide us through the documentation needed and the application process.
Zigurd 1y ago
It's unclear to me if Europe can move any faster than they can boot strap a VC culture. They can only grow a cadre of VC partners through experience. Some American firms have branches in Europe, and there are some European VCs that have decent scale, but I would guess it's 1/4th the size of the US venture business. Maybe less if you factor out investment that doesn't really look like US venture investment. European institutions should step up in the role of limiteds. The article doesn't give a lot of details, but the ones it does aren't inspiring confidence. A six month decision process is wildly incompatible with startup needs. EIB might be better off being limited partners in existing European VCs.
feelingsonice 1y ago
What does “inject” mean here? Iirc, Israel did something similar a while back and boosted a ton of startup early on, but they quickly died off and they realized you need the scrutiny from free market VCs to create competition. for a lot of startups
hintymad 1y ago
Does anyone know if any non-EU citizen can get such funding to start up a company in Europe? Say, an American?
- bone_frequency 1y ago
  Even if you were a local, you'd have to be "in the network" so to speak. Then you could push a meme project with some buzzwords that align with their political views and you would be allowed to dip in. Additionally, the EU is maliciously anti-wealth, even if you fund it yourself, they will actively cripple you with nonsensical regulations and taxes to make sure your company does not take off.
  - hintymad 1y ago
    > EU is maliciously anti-wealth, even if you fund it yourself, they will actively cripple you with nonsensical regulations and taxes to make sure your company does not take off. I'm a little cynical about this. Apparently EU has lots of wealthy people and they get to keep their wealth for generations. It's just that we don't necessarily even know who they are or how they keep generating wealth. Per Taleb in his book Skin in the Game: "Consider that about ten percent of Americans will spend at least a year in the top one percent and more than half of all Americans will spent a year in the top ten percent[1]. This is visibly not the same for the more static –but nominally more equal –Europe. For instance, only ten percent of the wealthiest five hundred American people or dynasties were so thirty years ago; more than sixty percent of those on the French list were heirs and a third of the richest Europeans were the richest centuries ago. In Florence, it was just revealed that things are really even worse: the same handful of families have kept the wealth for five centuries.[iii]" [1] 39% of Americans will spend a year in the top 5 % of the income distribution, 56 % will find themselves in the top 10%, and 73% percent will spend a year in the top 20 %. [2] The type of distributions –called fat tails –associated with it made the analyses more delicate, far more delicate and it had become my mathematical specialty. In Mediocristan changes over time are the result of the collective contributions of the center, the middle. In Extremistan these changes come from the tails. Sorry, if you don’t like it but that is purely mathematical. [ii] HBR article by Joan williams https://hbr.org/2016/11/what-so-many-people-dont-get-about-the-u-s-working-class https://hbr.org/2016/11/what-so-many-people-dont-get-about-t... [iii] Ref http://www.nytimes.com/2014/04/20/opinion/sunday/from-rags-to-riches-to-rags.html?_r=0 http://www.nytimes.com/2014/04/20/opinion/sunday/from-rags-t... [iv] http://krugman.blogs.nytimes.com/2014/04/25/piketty-and-pareto/ http://krugman.blogs.nytimes.com/2014/04/25/piketty-and-pare...
amelius 1y ago
They should start funding Mozilla, imho. EU's stance in consumer protection is a great match. Plus it is strategically smart to have a browser under your own control.
- badestrand 1y ago
  EU funds to pay for American engineers in California who earn 5x what European enginners get, great.
  - amelius 1y ago
    Yes, lure them to the EU. Open an office there.
andy_ppp 1y ago
€70bn is 150,000+ YC seed rounds? This seems like A LOT of cash filtering into the system whichever way you cut it.
PicassoCTs 1y ago
If you want to start something in tech- you got to eastern europe in europe. Everywhere else, established industries and clubs will leach all the motion from you. But in poland, the baltics, Finland -you somehow can start things and its still reasonable easy to set things in motion. And there is nobody there to stop you.
richardw 1y ago
Look, 6 months is better than 18 but it drives the type of startup you’re likely to get. Anyone trying to move fast just can’t participate. They’re forced to go elsewhere. You can only deal with organisations that can survive and plan for 6 months. What do they do in the meantime? Build? Wait? Especially in AI, the world is moving so fast that you need to make decisions within days, not half a year. How many frontier models and innovations arrive in half a year, while this lot think about the now-outdated proposal? All you’ll get are sluggish companies designed to suck up the funds. I used to work for such a company. The business model seemed to be whatever would fund hours of researchers time, and travel money for those smart enough to write papers for whatever conference was in a country they hadn’t visited yet. Targeting EU funds was top priority and they could do it by creating some arbitrary “consortium” that generated enough credibility with adjudicators. I hated the waste and the lack of actual goals.

307 points by saubeidl 1y ago

> Drawing on the current geopolitical landscape, Calviño sees the uncertainty generated by US President Donald Trump's economic policies as an opportunity for Europe. The opportunity of wasting the hard earned money of the citizens she means. Have they considered doing useful stuff like removing regulations, lowering taxes, fixing the immigration mess, etc? You know, what actually made America an innovation hub. This will end the same way it always does every time the EU gives away money to economic sectors they are jealous that the US have and they don’t: a select few will fill their pockets with nothing to show for it.

sillystu04 1y ago
That’s never been the European way of doing things. You can’t beat America at being America. From the East India Companies to Airbus, strong European companies have been made around strong European states.
- bboygravity 1y ago
  Bad example. The East India company era had WAY less regulation all around, way lower taxes, less types of taxes, a very attractive simple investment climate (the literal founding of the concept "stock market", in its simplest and most primitive form) and close to 0 (illegal) immigration. They also had no euro, no socialist EU and no self-imposed limitations on energy conversion (there was no electricity, but wind was huge and allowed for mass production of stuff).
  - sillystu04 1y ago
    When companies were operated by royal charter and owned by aristocrats there wasn’t much meaningful distinction between dividends and taxation. > They also had no euro, no socialist EU and no self-imposed limitations on energy conversion (there was no electricity, but wind was huge and allowed for mass production of stuff). These are the diseases of weak states, incapable of creating state ownership enterprises that could dominate the world.
- spwa4 1y ago
  You should ask Isaac Newton (yep, that one) about these strong European companies: https://royalsocietypublishing.org/doi/10.1098/rsnr.2018.0018 https://royalsocietypublishing.org/doi/10.1098/rsnr.2018.001... Btw: the East India trading company is still used in economics schools as an example of state interference in trade and what can go terribly wrong.
closewith 1y ago
> You know, what actually made America an innovation hub. An innovation hub or a capitalistic, fascistic hellscape about to collapse into itself? > This will end the same way it always does every time the EU gives away money to economic sectors they are jealous that the US have and they don’t: I think you are so far down the propaganda rabbit hole that you can't see the reality. Europeans do not want the US oligarchy. This move is to try to distance the bloc from the failed experiment that is the States.
- missinglugnut 1y ago
  In what reality is giving politicians a fund to pick winners and losers in the economy going to prevent fascism? The tech sector in the "fascist hellscape" is paying its workers 3-4x what Europe is, and Europe is doubling down on the policies that got it there. >I think you are so far down the propaganda rabbit hole that you can't see the reality You built your whole argument on a future collapse you've imagined for across the pond, rather than engaging with the topic at hand. You are the one who refuses to see.
  - closewith 1y ago
    > The tech sector in the "fascist hellscape" is paying its workers 3-4x what Europe is, and Europe is doubling down on the policies that got it there The absurd income inequality in the US tech sector is not the boast you think it is. > You built your whole argument on a future collapse you've imagined for across the pond, rather than engaging with the topic at hand. The collapse of US society has already occurred.

alecco 1y ago

Great idea and I think they should 10x it, but... the person in charge according to the article is EIB President Nadia Calviño. She is a Spanish career politician and a socialist lawyer with background in media and broadcasting. They rarely put in charge experienced people or at least engineers. It's so sad to see the EU crumble due to a cast of career bureaucrats squeezing it to its last drop. There are so many great universities and researchers to build things.

FirmwareBurner 1y ago
>They rarely put in charge experienced people or at least engineers. Because most of the time, the point of such government "investments" is to be another hidden wealth transfer from the taxpayers into the pockets of those with government connections (your Siemens, T-Systems, Capgemini, Thales, etc). That's a feature, not a bug. Imagine Dell, Zuck, Jobs, Page and Brin back in the day, waiting for handouts form the US government to fund their companies, instead of VCs. None of their companies would exist today. Governments are only good at funding infrastructure, education, healthcare and defense projects, you can't rely on them to build you the consumer focused private tech industry the US VC industry did. It's not something achieved through central planning, and the EU refuses to get that, so it keeps throwing money into the "maybe it'll work this time" bonfire.
- StopDisinfo910 1y ago
  > Imagine Steve Jobs, Larry Page and Sergey Brinn back in the day, waiting for handouts form the US government instead of VCs. The US hands out money extremely generously through federal grants, DARPA and orders which have to be made to American companies through things like the Buy American Act. Silicon Valley itself was spurred by the DoD spendings.
  - FirmwareBurner 1y ago
    >The US hands out money extremely generously through federal grants, DARPA and orders which have to be made to American companies through things like the Buy American Act. You're ignoring my point or arguing in bad faith, since I already addressed this to the comment you're replying to. The EU also spent a lot into defense and R&D, the difference is the US gov didn't spend money in the start-up consumer market, but they let private entrepreneurs commercialize some of the solutions that trickled down from the defense tech into the consumer sector to make money (CPUs, 3D graphics, radios, etc). This is where the EU is deficient and you can't fill this entrepreneurial visionary void with government bureaucrats shoveling taxpayer money around to their friends. What did DARPA have to do with Apple's success in the music and phones business? What DARPA money went into the iPod or the iPhone? They were made with commercial off the shelf chips that the likes of Nokia and Ericsson also had access to, not some super secret US DoD tech. Just like many SV companies, Philipps, Ericsson and Nokia also were government founded from selling radars and radios to the military initially before the tech trickled to consumer. Yet Apple is now a multi trillion company(that was nearly bankrupt in the 90s) and the EU phone companies have withered away. Why is that? Is it because of "DARPA and the government"?

FaridIO 1y ago

The folks who allowed the continent to fall behind through over-regulation would like you to know they'll now do a good job at being the capital allocators.

closewith 1y ago
The continent is well ahead in health, quality of life, justice and society, partly due to regulation.
- whatnow37373 1y ago
  Those are all irrelevant. The market will magically fix everything, don’t you know that?
  - j7ake 1y ago
    It’s funny because there are people in USA who actually believe health and quality of life are irrelevant because they’re not measured by GDP.
- kasey_junk 1y ago
  I think the concern is the fiscal ability for eu nations to continue to pay for the things that help it stay high on those metrics, especially without innovation. The productivity numbers for the eu are dreadful so something needs to change.
  - TheOtherHobbes 1y ago
    The distribution of productivity gains in the US is beyond dreadful, so something needs to change. Besides, it's screamingly obvious the US has literally chosen to pivot back to the Middle Ages, so even these captured productivity differences won't be an issue for much longer.
    - graemep 1y ago
      How is the US anything like the Middle Ages? You did say literally so can you do a point by point comparison? We have other people claiming the US is fascist and one of the aims of fascism was to take European culture and religion back to before the Middle Ages - they wanted to emulate the Roman Empire.

qoez 1y ago

Imagine if AI does become so powerful UBI is a necessity. How would europe be able to pay for UBI without money coming in and taxes being paid to fund it? Things like this seem critical for the future of the EU and yet I'm super sceptical this will lead to openai etc level quality.

JumpCrisscross 1y ago
> Things like this seem critical for the future of the EU Solving faraway hypotheticals in lieu of actual problems is half of the EU’s problem.
wesselbindt 1y ago
At what point would AI necessitate UBI? I'm assuming your idea here is, roughly speaking, that at some point, AI will displace a large section of the work force, rendering them homeless and unable to feed themselves, and that to prevent this, UBI would become necessary. But don't we already have homeless folks? Haven't we already been through technological revolutions putting people out on the streets? If this historical precedent is anything to go by, the politically dominant class is perfectly content with people going homeless on account of not being able to find a job. Seems to me that the classical solutions of pumping drugs into the streets, immobilizing the downtrodden, and straight up slavery through the prison system, are much more likely to happen than UBI
- dudefeliciano 1y ago
  if enough workers are displaced due to this, and they do not receive some form of income, the politically dominant class will be in danger
  - qoez 1y ago
    Or they make money the way B2B companies do; which seems like companies just shifting money around on the upper layers without it ever really reaching the hands of lower classes.
  - wesselbindt 1y ago

jarym 1y ago

investment is one piece of the puzzle - but you need talent, reasonable cost of living, and a fiscal climate that rewards success instead of sucking any sliver of it with onerous taxes. All those factors of course vary throughout the EU but it would be nice if they took a more holistic approach to supporting tech ventures.

deleted 1y ago
[deleted]
JumpCrisscross 1y ago
> All those factors of course vary throughout the EU but it would be nice if they took a more holistic approach to supporting tech ventures All of those things can be bought. One of Europe’s strategic disadvantages vis-à-vis America and China is low availability of big, risk-taking cheque writers. Fixing that today is worth more than a working group to write a paper about a holistic solution in ten years.
pornel 1y ago
The US is adopting isolationist policies based on a nationalist ideology. The government is run by anti-intellectuals. The US economic policy is based on xitter rants, and flip-flops every week. The fickle vindictive ruler is personally attacking businesses that don't make him look good. It's clear that in the US the path to success is now loyalty. The president runs a memecoin. The EU is getting ready to brain-drain the US.
- underdown 1y ago
  I make 4x in the US what I’d make in Germany.
- ExoticPearTree 1y ago
  > The EU is getting ready to brain-drain the US. It is not going to happen, this is just day-dreaming. Yes, I saw the news, but you can't compare a few tens of people wanting to leave the US for ideological reasons to millions of people that stay in the US because they can fare better and make more money or start new companies overnight because they have a great idea.

pknomad 1y ago

Good for EU for trying to improve tech market, but I recall seeing another thread here at HN why it can't be solved by simply throwing money at it.

StrauXX 1y ago

It's really tiring to see the same handful of arguments on HN every time anything related to Europe or the EU is posted on here. Yes, some things the USA is doing better than Europe, but far from everything and depending on your political leanings (or rather social position) even most.

chermi 1y ago
[flagged]
- newsclues 1y ago
  Seems comparison makes certain regions look good or bad, and that could lead to accountability which would be good or bad depending upon how you benefit or not from the policy. That’s part of the problem with globalists who want a single world government, one government for the world deprives the people of choice.
- miltonlost 1y ago
  How many of the top level comments are just blanket assumptions that this is going to be corrupt without any pointing at specifics of this proposal? The knee-jerk reactions are strong
  - FirmwareBurner 1y ago
    >How many of the top level comments are just blanket assumptions that this is going to be corrupt without any pointing at specifics of this proposal? How many points do you need on the graph till you're convinced they form a line? If some person or some org, has a history of spending money and not delivering anything, what are the odds "this time will be different"? To me, this initiative is just another point on that line.
  - sowhat25 1y ago
    Because it's their experience with how the EU is run. These top level commenters you refer to don't want to waste their time with the specifics is the proposal because they believe that these initiative is a poorly managed redistribution of tax money.

landl0rd 1y ago

Calviño is the wrong choice to lead this. Why not tap a few people from Mistral if they care about AI? Spotify if they care about more generic tech? Funding will not fix the fact that euro salaries are not even remotely competitive especially after tax. Maybe it’s better to be poor in europe than America but MLEs at large AI labs and bigtech SWEs are definitively not. Plus, capital is somehow still more risk-averse in the EU despite the ECB's policy rate consistently running >200bps lower than fed funds. And of course the process of getting funds from the EIB remains agonizing even with this change.

JumpCrisscross 1y ago
> Calviño is the wrong choice to lead this Will Calviño be picking and choosing the grantees?
- landl0rd 1y ago
  This isn't the point. More knowledgeable people at lower levels can help. But when leadership lacks domain expertise it's very hard to know what to do or not do, what will help and won't. She could be smart and lean heavily on industry experts but that still makes her the wrong choice to lead it when one of them could have done so better. This is the equivalent of private equity installing someone who knows nothing but MBA material at a biotech company or a ML research company or anything else where domain expertise can actually help. The EU is actually better at bringing in bits of "technocracy" to let industry experts lend their expertise. I don't know why they are doing that here. I think it's the wrong call.
  - amarcheschi 1y ago
    Elon Musk lacks domain expertise given how he asked to rewrite Twitter stack to the devs after it was bought If you're talking about the domain of startups and companies themselves though, I'll give you that
    - robertlagrant 1y ago

JumpCrisscross 1y ago

“The bank aims to process startup financing applications within six months, significantly improving from the current 18-month timespan.” Oof. The right way to do this would have been to match private financing so the EIB is providing capital but not gatekeeping. (That or commit to giving the first N companies to reach some milestone a bunch of cheap capital.)

RobRivera 1y ago
Matching private funding brings the decision making lever to private funders, creating a mechanism to extract tax dollars with minimal government discretion and would be a process ripe for abuse by those with significant capital. One person's gatekeeping is another person's stewardship and due diligence
- newsclues 1y ago
  Governments would never deploy capital in ways that are stupid, corrupt or gatekeeping. One person’s stewardship and due diligence is another’s person’s definition of fraud wealth transfer and crime.
  - TheOtherHobbes 1y ago
    Nor would VCs, obvs. How long does it take to get a Series A round, and how many bureaucratic hoops do petitioners have to jump through?
    - newsclues 1y ago
      Easier for government to collect more taxes than it is for VCs to raise more after either fail and go broke.
  - exe34 1y ago
    > One person’s stewardship and due diligence is another’s person’s definition of fraud wealth transfer and crime. Yes, that why you then buy the government and fire everybody who's investigating your many crimes. Much easier that way.

evanjrowley 1y ago

When it comes to European tech funding, I'm a big fan of NL Net's Next Generation Internet (NGI) grants[0]. These grants the only kind of investment I care about and the only kind I want to see. My opinion towards this is influenced by the enshittification[1] that has unfortunately been embraced by large tech companies and financial powers in the United States. Overall I'm not confident this is actually good news, but the fact that the financing is also available to researchers seems like a possible silver lining. [0] https://nlnet.nl/commonsfund/ https://nlnet.nl/commonsfund/ [1] https://en.wikipedia.org/wiki/Enshittification https://en.wikipedia.org/wiki/Enshittification

therebase 1y ago
I can totally second that. I have just stumbled over a project that was developed as part of that fund. Super minimal probably the funding and obviously only a start, but this has a 'dutch flair' of being practical, usable etc. As always: please send people to teach the germans about how to build things (2 extra cookies if you teach us how to *Railway*) I do think the way to success for EU is to start with this little elements. Maybe EU cloud infra later relies on one little OS component that is still maintained by 3 people - not one ;). If we invest our time in something else than cloning hyperscalers - maybe there is a silver lining in form of a technological jump on the horizon. What about a Eurocloud that is a distributed system and not a 'monolith by monopoly'. The Systems we replace are not cheap, so there is even money on the table. Building EU hyperscalers just would suck OS projects dry of their 'IP' and siff money to a account on the caimans or UAE somewhere. Not building them is the way. Maybe not make this a 'bring US startup culture to europe' thing as well? It leads to monopolies and a lot of 'loosers'. Not a super efficient way to build what in fact is infrastructure.

huqedato 1y ago

From a person who has dealt with the management of European research projects: these funds will go through the EU bureaucratic maze, don't even think they will be available directly to startups. There will probably be programs and sub-programs, projects and other craps like that to more difficult for people to access the money. It's how the EU works. That's why startups flee to US if they want serious financing. So leave me be very skeptical about this news.

huqedato 1y ago
PS: I really don't understand the downvotes to my post. I've just expressed my (educated and objective) warning.
- dudefeliciano 1y ago
  Please don't comment about the voting on comments. It never does any good, and it makes boring reading.
  - Chris2048 1y ago
    I love reading comments about the voting on comments; On the otherhand I find comments on what comments induviduals find "boring" to be tedious.
    - detaro 1y ago
      It's a quote from the site rules.
      - Chris2048 1y ago
        Actually, it's a quote from the comment I responded to. It, in turn, appears to be a promotion of one of the site guidelines. In turn I would promote the official guideline: "On-Topic: Anything that good hackers would find interesting" as well as the not-official personal guideline: "Guideline-lawering is boring, and uninteresting to any good hacker, or true codesman."

bjornsing 1y ago

These initiatives always end up the same way: bureaucrats distributing taxpayer money to the socially focused careerists at the top of large companies and academic institutions (perhaps after they’ve left and founded a startup). It’s just so engrained in the European way of thinking that you need to ”be someone”, not ”understand something” or ”be able to do something”. It’s sad, but that’s how it is.

JumpCrisscross 1y ago
> These initiatives always end up the same way By “these” do you mean anything European, or something specific to this structure?
- bjornsing 1y ago
  I was primarily referring to EU initiatives. But the national ”innovation system” here in Sweden is pretty much the same. It’s a cultural issue, not an organizational one, IMHO.
- bgnn 1y ago
  EU government funds are also similar.
deleted 1y ago
[deleted]
bgnn 1y ago
Very nicely put! I have been in discussions with these type of people, several times, to start a company in semiconductors and quantum computing. I was often the only one who can "do" things and it was not appreciated. Academics didn't have the time or will to start a company (and had no industry experience), but wanted to have more than 50% of the shares because the government or EU gave the money to them, in return the university wanted 30% cut because they bring "a prestigious name", bug companies forced on you by EU funds did't want shares but they wanted control (board seat) and IP rights. All these were for <500k seed fund which would barely cover couple of engineers salary for a year!

christkv 1y ago

This will be a transfer of money to existing big corp on BS projects that go nowhere. How about they just use the money as a cheap credit pool for VC's one a 1:1 match for private investments and maybe they can even make money from this. The person in charge is not fit to run a small coffee shop much less a 70B fund.

dachworker 1y ago

[flagged]

landryraccoon 1y ago
Can you be more specific? Which politician is using this fund in a corrupt fashion, to help which friend? Please provide names. Or are you simply expressing the same meaningless general cynicism that is so predictably and boringly parroted whenever any government tries to do anything?
- 77pt77 1y ago
  Only names? Is it even valid unless it's full names, dates of birth, addresses, bank account numbers, receipts and notarized video evidence where they explicitly admit to being corrupt?
- carlosjobim 1y ago
  If you assume that the previous poster is right and do a casual web search for corruption with EU fudns, will you find anything? It is so prevalent that your question makes as much sense as demanding the names of soldiers killed in the Ukraine war to believe the war is real.
- hulitu 1y ago
  > Can you be more specific? See the last wave of arrests in Brussels. (some defence lobby - they wouldn't touch the politicians).

littlestymaar 1y ago

I don't understand why people in the comment seem to obsess with “bureaucracy” and “taxpayers money”. The EIB is, as the name says: a bank. It has some strategic targeting running, but the way it works is through making loans. The EIB is making profits with its investment activity!

mleonhard 1y ago
EIB has EUR 500B of capital, invests about 80B/year, and makes about 2B/year profit [0]. European states buy EIB bonds which pay interest [1]. This new 70B will come from bonds sold to EU member states. The states need to approve purchasing the bonds. EIB earns about 3% profit. Private banks earn about twice that [2]. EIB is a non-profit organization. EIB makes about 10% of its loans outside of the EU. [0] https://www.eib.org/attachments/lucalli/20240237_070525_financial_report_2024_en.pdf https://www.eib.org/attachments/lucalli/20240237_070525_fina... [1] https://en.wikipedia.org/wiki/European_Investment_Bank#Funding_sources https://en.wikipedia.org/wiki/European_Investment_Bank#Fundi... [2] https://www.bankingsupervision.europa.eu/press/speeches/date/2024/html/ssm.sp241016~c532e5246d.en.html https://www.bankingsupervision.europa.eu/press/speeches/date...
carlosjobim 1y ago
The banks are a part of the government in the economic zone where they operate, or you could also say that the government is a part of the banks – since the banks have the strictly political privilege to conjure money. And bureaucracy is not limited to government offices.

fear91 1y ago

Why not finance a more wide tax break for tech companies, including small companies? I have seen first hand, one of my classmates from high-school, whom I didn't consider to be too bright, receive a 100k EUR grant to build an esports platform that ended up being a styled-up wordpress blog. He had zero interest in tech, never programmed, the works... He had no interest nor knowledge relating to tech, but managed to somehow get that grant. Meanwhile, I was paying taxes on hard earned freelancing dev money. We were both 23 years old at the time and it was really jarring. I'd rather they cut taxes for already profitable small companies. The taxes in EU are astronomic.

bjornsing 1y ago
I could not agree more. But the problem is: then the politicians / bureaucrats don’t get to decide who gets the money.
Canada 1y ago
> Why not finance a more wide tax break for tech companies, including small companies? Because then these communists wouldn't get to choose who gets the money.
constantcrying 1y ago
Can the EU directly regulate the details of the tax regulations of their member states? That would be extremely surprising to me and, even if done, would likely be seen as a sever overreach.
enaaem 1y ago
Tax breaks is not going to do much, because that is not where the real problem is. Imo EU is being underestimated. The EU is really competitive at boring high tech that bootstrap themselves like cars, civilian air planes and tooling, so the business and innovation climate is not bad. What's different from the EU and US is that the US has single capital market with more unified regulations where it is much easier to pool infinite VC money into an idea. Contrary to popular belief it's actually the LACK of EU regulations that makes the EU less competitive, because a company has to deal with 20+ regulatory bodies. In short, the EU should focus on more market integration.

option 1y ago

I wonder what percentage of that money would be spent on just complying with various regulations. Then it would be interesting to see this % comparison with US and China. Could be strongly correlated with ROI.

deleted 1y ago

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sharpshadow 1y ago

As with Germany’s 1€ trillion new credit, of which half goes to the military, so will the EIB ‘inject’ more than half of it into the military. Large established tech companies will get a big part and quantum startups will see their expected cash flow. Good timing for those quantum start ups which have been popping up through the whole EU recently.

nickserv 1y ago
Investing in the military seems like a necessity given what's going on. One madman to the east was bad enough, now there's another to the west. The Ukrainians have done some pretty incredible stuff with very basic tools and lots of ingenuity.

bitlad 1y ago

Given that all startups work 32 hours per week. Thats alot of money to spend.

Workaccount2 1y ago

Europe is going to have a hang-over from resting on it's laurels for the past 20-30 years. I don't know if people will be able to tolerate the changes needed to totally stand independent. If Europe wants to copy the powerhouse tech industry of the US, it's going to have to become more like the US.

koonsolo 1y ago
It's very hard to copy Silicon Valley, even other US regions are not able to do it.
- ExoticPearTree 1y ago
  There's something magical about California and New York (another tech powerhouse). NYC has this vibe of "getting stuff sone, no BS" kind of mindset. California has this relaxed vibe but at the same time the sky is the limit. I think it has something to do with how the sun shines there and the ocean. You feel like just working and things are going to be OK. I am always more productive in NYC or LA. And I have no real explanation for that.
  - dustingetz 1y ago
    NYC and SF have private capital concentrated in enormous quantity. Look to the preceding 5 decades to see how that happened, it did not spring up overnight.
lyu07282 1y ago
I don't think becoming even more neoliberal is going to solve anything for the EU, you people know one button so you all you ever want to do is press it harder to solve any problem, it's hilarious.
nickserv 1y ago
You mean the Euro should become the world's reserve currency?

scrollaway 1y ago

If anyone is in the US and interested in coming over to Europe to build a startup… I started an incubator specifically for US based entrepreneurs looking to make the leap from what is, right now, an incredibly unstable place to build, and assist in getting both private and public funding for you, and take care of all the admin and immigration paperwork. Come to Brussels, Belgium. It’s the most international city in the world per capita, English friendly, welcoming to expats and there’s 0% capital gains tax. It’s also human sized, you don’t need a car to get around. https://sevenseed.eu/program https://sevenseed.eu/program Shoot me an email if you’re interested. This program was birthed right here on HN in a Who’s hiring thread. I’ve talked to 50+ founders who have had enough of the current admin and want change.

ayushrodrigues 1y ago

I was happy to read this as a founder who was raised in the UK. I wish I didn't have to move to the US to start a company but it's starting to feel like a joke here. > The bank aims to process startup financing applications within six months No good founder is waiting for 6 months. It makes absolutely no sense when VCs can make decisions in days, hours even.

alephnerd 1y ago
> I was happy to read this as a founder who was raised in the UK The UK isn't a member of the EIB. > No good founder is waiting for 6 months. It makes absolutely no sense when VCs can make decisions in days, hours even. Speculation, but based on similar initiatives done in the EU in the past, it will target industrial and manufacturing vendors and suppliers (especially as this proposal is linked to KfW). That said, no point discussing this until the final proposal actually gets presented and voted on by the Board of Governors. Most of what exists publicly is just vague press releases.
- ayushrodrigues 1y ago
  True, but the EU startup ecosystem is small and shared. Only so many places to raise capital from.
  - alephnerd 1y ago
    Yep! But the overlap between the UK and EU ecosystem would be dwarfed by the overlap of the US-UK ecosystem. So long as the EU doesn't have their own equivalent of Index Ventures, I'm not sure an EIB style industrial policy program would have significant impact on the British startup scene.
cheeseface 1y ago
Most startups will use funds like in addition to VC funding. It allows you to increase your runway so you’re better positioned for your next funding round.

owenversteeg 1y ago

There is a lot of discussion here trashing EU programs for startups and not a lot of specific details, which is disappointing. I will try to provide a more substantive critique. My personal experience, having been involved with many startups in both the EU and US, is that EU government funding is completely useless for almost all startups. Why? First of all, you have to be part of the existing networks. If your business does not have university affiliations with people that get existing grants, or connections to EU bureaucracy, then you can forget about getting a dime. Then there is the risk aspect: if you are doing anything even remotely novel, or with any amount of risk, forget about it. This is not just my opinion, Mario Draghi, previous president of the ECB and Italian PM, said that the EU does not take enough risk to produce real innovation. And finally there's the timelines: from researching funding to cash in your bank account is always measured in years. So, my expectation is that these funds will be distributed to members of the bureaucratic class and their network, for low-risk, low-reward projects, on a timescale too slow for most startups. I hope to be proven wrong, but the results of previous decades of EU funding programs do not make me optimistic.

NooneAtAll3 1y ago
...so it's corruption with extra steps?
- ithkuil 1y ago
  It's a weird kind of corruption where the most diligent and patient and boring wins
- arlort 1y ago
  No, it's the result of the public's/politicians' pathologic risk aversion and swiftness in calling everything corruption Since it'd be obviously bad (sarcasm) if public money were spent on projects that deliver nothing or the people receiving them used them for anything other than the narrowest interpretation of the goal then you absolutely (sarcasm^2) have to have 50 different layers of checks and plans and assessment to make sure the little money is spent on the entities that lie the best. But at least no opposition politician can complain someone bought a fancier watch than they'd like or didn't deliver enough Anyway the EIB is a different kind of funding process than EU grants and should be more effective (even just because capital doesn't come out of the EU budget or member states directly), though how much I don't know

constantcrying 1y ago

The US has a start-up culture heavily centered around venture capitalist investments. The EU is currently trying to be the venture capitalist and to create a European start-up culture where none was before. I think this is a terrible idea, because it does not address why there is no European startup culture. Europe has tech talent and Europe has money, yet it has no start-up culture. There are many reasons for this. To me the most important ones are: - Many EU member states have very start-up hostile labor laws. In Germany many tactics/offerings US startups use to hire talent are illegal. - The wage difference between hard work at a startup, less hard work at a large corporation and very low stress work in a government office is minimal. Working for a startup is almost never financially rewarding. - The mainstream social democrat conception of work, which much of the population shares, is totally at odds with American start-up culture. Money does not solve any of these problems, because it does not answer the single most important question. Who is going to do anything with this, that is actually worthwhile. I have seen dozens of these EU funded projects and as a tech enthusiast I think many of them are exciting and cool and fun and interesting. The number of actual useful products I have seen is at zero.

sylware 1y ago

You mean ultra performant RISC-V 64bits microarchitecture CPU at 18A manufactured in EU?

donperignon 1y ago

From my personal experience this funds most of the time end up being absorbed by big corporations that had the contacts and the bureaucratic muscle. So basically it's throwing away 70B euros of citizen taxes.

_zamorano_ 1y ago
Exactly this. Imagine the slowest consultant firms, with the most powerpointists, huge hourly rates for very simple projects that pay peanuts for the not so bright devs... These are the companies with the connections that are getting the money.

nish1500 1y ago

I am in the process of moving my startup from Canada to Germany. I started in India, so I have experience running a bootstrapped business on three continents. I am not looking for funding, and in fact use the business profits to invest in other companies. Dealing with German bureaucracy is the hardest thing I have done in my life, perhaps second only to bootstrapping my business. Bureaucracy isn't a side effect of poor planning; it's tool to control individual liberties and capital, without going full communist. For the first time, I am considering selling my business. I want Europe to succeed, but I see no way how. Any little faith I have in EU actually resides in a handful of underdogs like Estonia and Poland. Most of that €70B is going in the pockets of bureaucrats and consultants, assuming any startup sees a dime within 3 years.

akreal 1y ago
What is the motivation to move startup from Canada to Germany, if I may ask?

maelito 1y ago

As someone working on a project funded partly by the EU : there was no bureaucracy or very few. It's great.

DoingIsLearning 1y ago
Can you share what vehicle you used for funding? My experience is that we had to hire consultants from big corp consultancy firms just to guide us through the documentation needed and the application process.

Zigurd 1y ago

It's unclear to me if Europe can move any faster than they can boot strap a VC culture. They can only grow a cadre of VC partners through experience. Some American firms have branches in Europe, and there are some European VCs that have decent scale, but I would guess it's 1/4th the size of the US venture business. Maybe less if you factor out investment that doesn't really look like US venture investment. European institutions should step up in the role of limiteds. The article doesn't give a lot of details, but the ones it does aren't inspiring confidence. A six month decision process is wildly incompatible with startup needs. EIB might be better off being limited partners in existing European VCs.

feelingsonice 1y ago

What does “inject” mean here? Iirc, Israel did something similar a while back and boosted a ton of startup early on, but they quickly died off and they realized you need the scrutiny from free market VCs to create competition. for a lot of startups

hintymad 1y ago

Does anyone know if any non-EU citizen can get such funding to start up a company in Europe? Say, an American?

bone_frequency 1y ago
Even if you were a local, you'd have to be "in the network" so to speak. Then you could push a meme project with some buzzwords that align with their political views and you would be allowed to dip in. Additionally, the EU is maliciously anti-wealth, even if you fund it yourself, they will actively cripple you with nonsensical regulations and taxes to make sure your company does not take off.
- hintymad 1y ago
  > EU is maliciously anti-wealth, even if you fund it yourself, they will actively cripple you with nonsensical regulations and taxes to make sure your company does not take off. I'm a little cynical about this. Apparently EU has lots of wealthy people and they get to keep their wealth for generations. It's just that we don't necessarily even know who they are or how they keep generating wealth. Per Taleb in his book Skin in the Game: "Consider that about ten percent of Americans will spend at least a year in the top one percent and more than half of all Americans will spent a year in the top ten percent[1]. This is visibly not the same for the more static –but nominally more equal –Europe. For instance, only ten percent of the wealthiest five hundred American people or dynasties were so thirty years ago; more than sixty percent of those on the French list were heirs and a third of the richest Europeans were the richest centuries ago. In Florence, it was just revealed that things are really even worse: the same handful of families have kept the wealth for five centuries.[iii]" [1] 39% of Americans will spend a year in the top 5 % of the income distribution, 56 % will find themselves in the top 10%, and 73% percent will spend a year in the top 20 %. [2] The type of distributions –called fat tails –associated with it made the analyses more delicate, far more delicate and it had become my mathematical specialty. In Mediocristan changes over time are the result of the collective contributions of the center, the middle. In Extremistan these changes come from the tails. Sorry, if you don’t like it but that is purely mathematical. [ii] HBR article by Joan williams https://hbr.org/2016/11/what-so-many-people-dont-get-about-the-u-s-working-class https://hbr.org/2016/11/what-so-many-people-dont-get-about-t... [iii] Ref http://www.nytimes.com/2014/04/20/opinion/sunday/from-rags-to-riches-to-rags.html?_r=0 http://www.nytimes.com/2014/04/20/opinion/sunday/from-rags-t... [iv] http://krugman.blogs.nytimes.com/2014/04/25/piketty-and-pareto/ http://krugman.blogs.nytimes.com/2014/04/25/piketty-and-pare...

amelius 1y ago

They should start funding Mozilla, imho. EU's stance in consumer protection is a great match. Plus it is strategically smart to have a browser under your own control.

badestrand 1y ago
EU funds to pay for American engineers in California who earn 5x what European enginners get, great.
- amelius 1y ago
  Yes, lure them to the EU. Open an office there.

andy_ppp 1y ago

€70bn is 150,000+ YC seed rounds? This seems like A LOT of cash filtering into the system whichever way you cut it.

PicassoCTs 1y ago

If you want to start something in tech- you got to eastern europe in europe. Everywhere else, established industries and clubs will leach all the motion from you. But in poland, the baltics, Finland -you somehow can start things and its still reasonable easy to set things in motion. And there is nobody there to stop you.

richardw 1y ago

Look, 6 months is better than 18 but it drives the type of startup you’re likely to get. Anyone trying to move fast just can’t participate. They’re forced to go elsewhere. You can only deal with organisations that can survive and plan for 6 months. What do they do in the meantime? Build? Wait? Especially in AI, the world is moving so fast that you need to make decisions within days, not half a year. How many frontier models and innovations arrive in half a year, while this lot think about the now-outdated proposal? All you’ll get are sluggish companies designed to suck up the funds. I used to work for such a company. The business model seemed to be whatever would fund hours of researchers time, and travel money for those smart enough to write papers for whatever conference was in a country they hadn’t visited yet. Targeting EU funds was top priority and they could do it by creating some arbitrary “consortium” that generated enough credibility with adjudicators. I hated the waste and the lack of actual goals.