European policy towards venture capital: Myth or reality?

In reaction to the enormous lack of venture capital in Europe compared to the US, the European Union, until now relatively absent from the venture capital market, has launched new programmes focusing on direct financing of the setting up and development of venture capital funds (by capital participation or contribution to overheads) as well as on stimulating the general conditions for better access to finance. This paper highlights the different interventions in financial engineering and argues that these can give better value for public money than classical subsidy schemes.