The European Commission announced today that it has invested $1.1 billion into venture capital funds across the continent, since January.
The massive figure is part of an ambitious program to accelerate the continent’s high-tech economy, something the EC believes is critical to dealing with the region’s stubborn unemployment.
“The investment plan for Europe aims at providing the financial instruments that the market is not providing today so that Europe can invest in its future,” said Jyrki Katainen, EC vice president for Jobs, Growth, Investment and Competitiveness, in a statement.
The funding highlights a key difference between European and U.S. economic policy. Europeans are clearly more comfortable with government taking a stronger role in catalyzing markets than are their counterparts in the U.S.
The EC program is meant to address the chronic complaint from entrepreneurs that funding is far more difficult to raise in Europe than elsewhere. In many cases, those companies choose to move overseas in search of that funding, a talent drain the EC wants to stop.
The money is, so far, being distributed as part of agreements signed with 28 funds (full list here). The hope is that these funds will use this money as leverage to raise another $13.22 billion.
That goal won’t be easy to reach. According to a report released today by Dow Jones VentureSource, 13 European-based venture capital funds closed $940 million in the third quarter of 2015, down 58 percent from the previous quarter but up 5 percent from the same period a year ago.