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'Fact of life': some EU funding in new tech will get lost

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The loss of €230,000 of EU taxpayer money following the bankruptcy of its recipients is unfortunate, but unavoidable, said Bert De Colvenaer, a high-up EU civil servant who heads an EU public-private partnership for electronic components and systems.

“I don’t like cowboys and we are not charity – but if we don’t take any risk, there will be nothing to gain,” De Colvenaer told EUobserver in an interview.

  • Bert De Colvenaer has been executive director of ECSEL since 1 January 2016 (Photo: Peter Teffer)

De Colvenaer is the executive director of the joint undertaking – EU jargon for public-private partnership – called ECSEL, which stands for electronic components and systems for European leadership.

The ECSEL finances research into technology such as semiconductors, automated systems, and integration of smart systems.

The European Parliament’s committee on budgetary control is due on Monday (19 February) to debate the annual sign off on the budgets of the EU’s more than 40 agencies and joint undertakings.

The draft report covering his organisation proposed to grant De Colvenaer discharge for the 2016 budget, but did make some observations, as MEPs in the discharge procedure often do.

The author of the draft report, centre-right Irish MEP Brian Hayes, proposed the parliament to express “concern” over the bankruptcy of two companies that had received €230,000 in payments from the PPP, ECSEL’s predecessor.

Hayes noted that it took four years to attempt to recover the payments.

De Colvenaer said there was little anyone could do if a company went bankrupt.

“What can I do? Even suing – there is no one to sue. The legal entity is gone. So the only thing I can do is waive the money. Unfortunate, but it does happen,” he said.

“This is a fact of life. Everyday in every single European country, companies go bankrupt,” he noted.

While he acknowledged that it was unfortunate that public money was lost, he stressed that the sum involved was only a small part of the total budget.

“How big is that problem, €200,000 compared to the millions, billions we spend?”

The joint undertaking was set up for a period of ten years, with an envisaged contribution of €1.2bn from the EU budget, €1.2bn from national governments and €1.7bn from companies.

De Colvenaer added that while his organisation is as careful as possible, risks were intrinsic to his line of business.

“If we have to always secure any activity with belt and braces to make sure that nothing happens, you can’t do research,” he said.

The ECSEL partnership was set up in response to competition from the US and Asia – in particular China, Japan, South Korea, and Taiwan.

The goal was to prevent the EU from becoming strategically dependent on competing markets for its semiconductors and other vital components.

However, De Colvenaer said he had to be careful about boasting about concrete improvements in products the joint undertaking has achieved.

“We can say: ‘this is the type of technology that we have been working on and we have reached good results’, he said, but only “once a technology has been developed that obviously will go into some devices – telephones, computers, televisions, whatever.”

But how that technology is used in a commercial product is proprietary information.

“We know some of the companies do have some of the technologies in their telephones, but we are not allowed to say which companies and in which phones,” he said.

No Croatia and Cyprus, but Israel and Turkey

The Brussels-based ECSEL joint undertaking has all EU member states participating in it, except for Croatia and Cyprus.

“They are very welcome to participate, let that be clear,” said De Colvenaer. “There is no obligation to participate.”

He said he did not know why those two EU states decided not to join.

Non-EU countries that have an associated status may participate. For instance, Turkey and Israel do.

That may be a way for the United Kingdom to continue its participation in the partnership, which runs until 2024 – five years after the UK is expected to move to a transitional period on its way out of the EU.

“If the UK were an associated country, there is no reason why they would be treated differently. But whether they will or won’t, is something I cannot comment on,” said the director.

Quicker boat

De Colvenaer previously headed another joint undertaking, which aimed to stimulate the development of hydrogen fuel.

“The joint undertakings – there are seven – are all independent legal entities,” he said, noting that this made them more flexible than if the European Commission was in charge of the funding programmes.

“A big boat turns much slower. A small boat may turn much quicker and can be much more tuned and adapted to the task it has to do,” he said.

The EU also has a European Institute of Innovation and Technology, based in Budapest, but that organisation is more focused on connecting companies and organisations, said De Colvenaer.

“You need both,” he said.

He was less sure of French president Emmanuel Macron’s suggestion last year that the EU should have a “disruptive innovation agency”.

“There needs to be some financing mechanism to create this kind of disruptive technology,” De Colvenaer said, adding that it was difficult to predict in advance which technology would be disruptive.

“Do we need the technology? Yes. Do we need an agency to support this? We need the mechanism, some kind of mechanism to support [it].”

Following Monday’s debate, the discharge report will be put to a vote in the committee, and later this year in plenary.

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