EUROPE
European Innovation Council earmarks €20 million to fund Ukrainian startups amid growing scrutiny

The European Innovation Council (EIC) will provide €20 million in funding for Ukrainian startups just days after an MEP launched an investigation into the problems that have plagued the body since its launch.

The Commission plans to amend the EIC’s 2022 work programme to allocate grants of up to €60,000 and non-financial support to at least 200 Ukrainian deep tech startups, Research and Innovation Commissioner Mariya Gabriel announced on Thursday (9 June).

The EIC was launched last year under the Horizon Europe, the EU flagship research and innovation programme. The EU body includes a sector specialised in funding, the EIC Accelerator, designed to provide financing for EU startups and SMEs in developing and scaling high-risk deep tech.

However, the EIC has experienced several issues since its launch, including significant delays in handing out financing to recipients. On Monday, conservative MEP Christian Ehler announced the launch of an inquiry into the EIC’s operation to produce a report on its issues and potential fixes.

“Due to Commission infighting on the management of the EIC fund, dozens of startups are left without the cash flow they were promised”, Ehler told EURACTIV. “This puts the whole instrument at risk.”

Ukrainian startups

The €20 million in funding announced this week would be available to startups through a call opening on 23 June. Gabriel said at a press conference, the aim is to establish “a pan-European network of startup associations to support the integration of Ukrainian tech innovators into European ecosystems and to enhance their operations in Ukraine.”

Participation, the Commission says, will also help prepare Ukrainian startups to compete for EIC funds.

“Based on our assessments, more than 70% of startups continue their work in Ukraine despite the war”, said Olha Stefanishyna, Ukraine’s Deputy Prime Minister for European and Euro-Atlantic Integration. “So this investment is very valuable. They are ready to work and develop, but most projects at the early stages need additional funding to survive.”

She added that Ukrainian companies could also propose sustainable solutions to issues within the EU’s ecosystem, stressing that “at the beginning of this aggression, many Ukrainian companies and people fled to the European Union. We are very much already integrated into the EU ecosystem, and we have some solutions to suggest.”

Also announced was the launch of the first Ukrainian School hub earlier this month. It is set to provide a space for displaced Ukrainian pupils to access resources and tools to work alongside the education they receive at schools in EU member states.

An agreement signed last October to associate Ukraine with Horizon Europe and the Euratom Research and Training Programmes also came into effect on Thursday, opening the door for greater collaboration between Ukrainian and EU researchers and businesses.

The financial contribution normally required for participation in the two programmes has been waived for 2021 and 2022 in light of the war.

Parliamentary investigation

But the EIC as a whole has been under substantial scrutiny since its launch. Complications to do with the body’s management, particularly in terms of the involvement of the European Investment Bank in overseeing its operation, have led to significant and multiple delays in recipients receiving their financing.

In May, the Commission acknowledged these hold-ups, attributing them to the EIC’s restructuring and management which it said should be concluded by the end of June.

Ehler, who sits on the parliamentary committee on industry and spearheaded the work on Horizon Europe, called on the Commission last month to address the issues and announced plans to investigate further and produce a report on the key concerns and how they could be tackled.

“The [EIC] should be a game-changing instrument for EU deep tech startups”, Ehler wrote on Twitter. “The pilot showed the EIC can deliver, but it is not plagued by the self-inflicted implementation issues of the [Commission].”

Ehler is now calling for submissions of EIC experiences, both positive and negative, by next week. The inquiry’s primary focus will be on the EIC Accelerator delays, Ehler told EURACTIV, but will also look into the role of the EIC Board and the lessons learned from the EIC’s 2018-2020 pilot phase.

[Edited by Luca Bertuzzi/Alice Taylor]

Source: Euractiv.com

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