Weekend Economists: What Goes Up....June 1-3, 2012

[Demeter]

42. EU lawmakers back venture capital "passport"

CUE THE TSUNAMI!

http://www.reuters.com/article/2012/05/31/us-eu-venturecapital-idUSBRE84U0FP20120531

European Union lawmakers approved a draft law on Thursday making it easier to channel funds into start-up companies from next year, inserting a safeguard the venture capital industry fears will make the regime too expensive.

The European Parliament's economic affairs committee voted in favor of the law which creates the first pan-EU "passport" for venture capital (VC) funds, allowing them to market themselves to potential investors across the 27-country bloc.

The sector is currently small, raising only about 4 billion euros ($5 billion) annually because it is fragmented along national lines. There are private placement rules in some countries and none in others, making it harder to persuade investors to step forward and build up funds of size.

Faced with an ailing economy, policymakers hope such funds will help start ups grow into successful firms like internet voice and video service Skype, which was backed by venture capital in its early days...MORE