European Cultural and Creative Sectors

1. European Cultural and Creative Sectors Presentation at Seminar on Iceland’s EU application and Creative Industries. Public policy, support structure and opportunities Gunnar Magnusson European Commission DG Education and Culture - MEDIA Programme and Media literacy Unit

2. Outline of presentation1. Overview of current regional and EU policies and support to the cultural and creative sectors (CCS)2. European Commission proposals for the next Multifinancial Framework (MFF) in 2014-2020 with regards to the CCS3. What are the possibilities for Iceland to benefit from these EU policies/support?

3. Some definitions • CCS: Cultural and Creative Sectors • EIB Group: European Investment Bank and European Investment Fund • DG EAC: Directorate Generale Education and Culture • SME: Small and Medium Sized Enterprise (less than 250 employees or €43 million turnover) • EEA: European Economic Area • CIP: Competitiveness and Innovation Programme • FP7: Framework Programme 7

4. 1. Overview of current regional and EU policies and support to the cultural and creative sectors (CCS)

5. EU regional policy/structural funds aim to- help each region achieve its full potential - improve competitiveness and employment at regional level by investing in areas of high growth potential - bring living standards in the countries that have joined the EU since 2004 up to the EU average as quickly as possible

6. Where and how it is spent? • - Regional policy is investing in all EU regions, in line with the Europe 2020 goals • - Particular efforts are being made in central and east European EU countries and regions with special needs in the other EU countries • - Not sector specific/constrained although there is a strong focus on support for innovation and research, sustainable development, and job training in less advanced regions

7. Available regional fundingRegional spending for 2007-13 accounts for over one third of the EU budget – or some €350 billion. Depending on the what is being funded, and in which country or region, the money comes from three difference sources:- the European Regional Development Fund (ERDF) – general infrastructure, innovation, and investments. - the European Social Fund (ESF) – vocational training projects, other kinds of employment assistance, and job-creation programmes. - the Cohesion Fund – environmental and transport infrastructure projects and the development of renewable energy. This funding is for 15 countries whose living standards are less than 90% of the EU average (12 newest EU members plus Portugal, Greece and Spain).

8. Examples of regional support for CCS ERDF in Northeast England – direct support for videogames and multimedia ERDF in Malta – agreement with Bank of Valletta to provide loan guarantees to SMEs, including those which are operating in the CCS ERDF co-operation with EIF through JEREMIE and JESSICA Programmes for example in Poland, Lithuania and Langeduc Roussallon (France)

9. FP7 Research and Development 54 Bn CIP Competitveness & Innovation 3,6 Bn Overview of EU Policy Areas MEDIA 755M EIT 309M Structural Funds 347 Bn (86 for R&I) LLP Education & Training 6,2 Bn LIFE+ 2,1 Bn Comenius (preschool, comp. and Upper Sec) Leonardo da Vinci (vocational edu. & training) Erasmus (university level scholarships ) ErasmusMundus (third country) Grundtvig (adult education) E Twinning : ICT in schools Transversal Act. Ideas: Fundamental research (ERC) 7,5 Bn People: Marie-Curie-Scholarships (4,7 Bn) JRC(Joint Research Centres) 1,75 Bn • Capacities: • 4,1 Bn • Regions of Knowledge (126 M) • Dev Research policy (CREST, ERA-Watch, OMC-Nets) (70 M) • SME research (1,3 Bn) • Research potential of cohesion regions (340M) • Science & Society. (280 M) • Infrastructure (1,7 Bn) incl Risk sharing finance facility (RSFF) • Cooperation: 32,4 Bn • Themes: • Energy (2,3 Bn); Environment (1,9 Bn); Space (1,4 Bn); Social & Econ.Sciences (0,6 Bn) • ICT (9 Bn); • etc • Formats: • JTI (inclRisk sharing finance facility RSFF) • Art 169: cooperation of nat. Programmes • ERA-Nets (plus) • etc • Enterprise & • Innovation (EIP) • 2,1 Bn • Financial instruments (1,1 Bn) • Service networks: SME consultancy, Technology-transfer, FP7 participation, • IPR use and awareness • Networking of actors: policy development and learning • Analysis and studies • e-business • Eco-innovation (430 M): market replication; Financial instruments , Networking • Etc. Intelligent Energy Europe (IEE)727 M (Energy efficiency; market up-take; awareness raising) ICT728 M (market up-take ICT; e-learning; ICT application) Environment:policy monitoring &policy development; NGO projects • ERDF, ESF, Cohesion Fund • Objectives: • Convergence (251 Bn) • Competitiveness & employment (49,1 Bn; ERDF, ESF) • Territorial cooperation (successor to INTERREG) (7,75 Bn) • Priorities: • Research, Innovation, Environment • New Instruments: • JEREMIE (SME financial instrument) • JESSICA urban dev. • JASPERS technical assistance • + EAFRD & EFF Committees work programme – work programme – work programme 3 Committees 5 Committees 10 Com- mittees Committee Com- mittee Com- mittee LIFE+ Operational Programmes LIFE work programme Managing Authorities (Member States & Regions • Regions / MS / Agencies COM (RTD, ENTR, TREN, INFSO, EAC) • FP7 Agency • (People, SME) • ERC(Ideas) CIP Agency IEE, IRC/EIC Agencies Member States / COM EIB/EIF: CIP financial instruments, FP7: RSFF COM (ENTR, ENV) Implementation: projects, networks, award of grants and subsidies, etc. COM (INFSO) • Bodies for • territorial • cooperation EIF: JEREMIE

10. MEDIA Production Guarantee Fund • Objective • To support and facilitate the access of European film producers to bank credits • Encourage banks to grant loans to producers by discounting contracts in view of cash-flowing productions • Instrument • Guarantee fund • Share with banks the risk related to loans made to producers • Leverage effect 10

11. MPGF - How it works EU Budget € 8 M € 2 M Audiovisual SGR MPGF IFCIC € 10 M Producer 1 Producer 2 Producer 3 Producer 4 Producer 5 Producer 6 Film X European independent producers ask for a credit to their local bank who in turn applies for MPGF guarantee Film Y Film Z

12. Examples of Icelandic beneficiaries • MEDIA Programme: Numerous Icelandic films, TV content and videogames • MPGF: Legends of Valhalla – Thor • Culture: Festivals and exhibitions

13. How to obtain funding? • MEDIA Desk in Iceland • Nyskopunarmidstod • Evrópustofa • Icelandic Ministry for Foreign Affairs • EU Delegation to Iceland • www.europa.eu • European Investment Bank • European Investment Fund • Etc.

14. 2. European Commission proposals for the next Multifinancial Framework (MFF) in 2014-2020 with regards to the CCS

15. EU priorities for new Programmes New actions proposed by the Commission for the 2014-2020 period need to take into account: EU 2020 long term strategy of the EU EU right to act Demonstrated EU added-value Simplification and cost-effectiveness Impact Assessment

16. Creative Europe 2014-2020 Commission proposal € 1.8 bn Cross-sectoral 15% Financial Instrument (CCS Guarantee Fund) Market Intelligence, Cultural and Media Literacy, etc 55% 30% MEDIA Culture Cinema, TV, video games Music, publishing, heritage, etc

17. New MEDIA 2007 schemes Policy initiatives MEDIA 2007 Media literacy MEDIA Mundus CREATIVE EUROPE Culture Programme, Heritage Label, EU Capital of Culture Council and EP conclusions & recommendations Structured dialogue with the sector External Policy and cooperation (WTO, UNESCO) EU2020 Strategy Digital Agenda Innovation Union New skills & jobs

18. Creative Europe objectives • General Objective • Foster the safeguarding and promotion of the European cultural and linguistic diversity • Strengthen the competitiveness of the CCS with a view to promoting smart, sustainable and inclusive growth • Specific objectives • Support the capacity of the European CCS to operate transnationally • Promote the transnational circulation of CC works and operators and reach audiences in Europe and beyond • Strengthen the financial capacity of the CCS (SMEs) • Support transnational policy cooperation in order to foster policy development, innovation, audience building and revenue streams

19. Creative Europe Features • One single gateway for all CCS • Synergies for cross-sectoral actions • Specific actions for each strand’s specific needs • Management cost savings • Synergies with other EU actions • Focus on actions with high EU added-value, cost-effectiveness, systemic impact • Link to EU long term objectives • Innovative financial instrument

20. New Financial instrument Guarantee facility to share credit risk with banks With banks investing in portfolios of loans To SMEs of the creative industries Transnational capacity-building / expertise for banks: non-financial leverage Transition from grants to loans where possible Managed by the EIF € 200 million fund raising credits for up to € 1 billion to the benefit of SMEs in CCS 20

21. Creative Europe MEDIA and Culture Financial Instrument Capacity Building Risk sharing CCS SMEs and professionals Banks • Training • Finance • Management • Investment readiness • Networking • Access to market • Co-production forums Capacity building Networking Technical support • Guarantee Facility • Fund € 200 million • Raising up to € 1 bn of bank loans • Covering 20-30% of the financing gap Dialogue

22. Horizon 2020 / COSME Horizon 2020 Programme will replace the current FP7 and it is likely that those CCS which have a digital/technical element to them will be eligible COSME will replace the current CIP and will continue to work with SMEs, partly including those operating in the CCS Close co-operation between the different EU programmes to prevent duplication of efforts and have a greater impact

23. 3. What are the possibilities for Iceland to benefit from these EU policies/support?

24. What does this mean for Iceland and its application for EU Membership?EEA agreement already makes Icelandic entities eligible for most European support programmes but not for regional policy/structural fundsEEA countries do not participate in the creation of these programmes as it is a dialogue/negotiations between Commission, Council and ParliamentMany opportunities for Iceland with regards to regional policy, including co-operation with the EIB Group

25. What does this mean for Iceland and its application for EU Membership?EEA agreement already makes Icelandic entities eligible for most European support programmes but not for regional policy/structural fundsEEA countries do not participate in the creation of these programmes (dialogue between Commission, Council and Parliament)Many opportunities for Iceland with regards to regional policy, including co-operation with the EIB Group

26. Some personal thoughts on the CCS... Difficult times ahead in Europe: Slowdown of economic growth, higher unemployment, greater public debt and questions being raised about Europes ability handle the crisis What has that got to do with the CCS? The CCS can offer great possibilities in creating high value jobs, contributing to growth, attract foreign investments, produce tax revenues for the state and strenghten the identity of Europe and its members

27. What to do and how to do it? Investment in the CCS with public AND private funds is key Not enough to set up public funds which offer traditional grants to SMEs in the CCS Use public funds to encourage private investors to invest in the CCS Can be achieved through loan-guarantee instruments which can help CCS SMEs obtain bank credits Public private partnerships such as through investment, private equity or VC funds is another way of mobilising private sources of financing Creating conditions for dialogue between entrepreneurs and investors is also critical (investor AND investment readiness programme)

28. Finally.... The European Commission is committed to strengthening the environment for SMEs operating in the cultural and creative sectors and is now proposing its 2014-2020 programmes to the European Council and Parliament Iceland has a fantastic history of developing and producing cultural and creative content such as music, film, literature, videogames etc which will undoubtedly continue with or without EU membership

29. But.... I hope this presentation has provided you with some ideas of how possible EU accession could provide Iceland with better tools and instruments to further support its cultural and creative sectors...

30. Thank you for your attentionQuestions & CommentsGunnar MagnussonDG EAC, Unit D3gunnar.magnusson@ec.europa.euhttp://ec.europa.eu/media