BRUSSELS (Reuters) - European Union states and their joint parliament in Brussels on Tuesday agreed new rules to give smaller companies improved access to financing, a move the bloc said would help create jobs and spur economic growth.
After the rules are formally adopted, European venture capital funds - which support higher risk start-ups - will find it easier to invest in a wider range of companies, including small and medium enterprises.
"The reforms we have agreed – expanding investment possibilities for funds, broadening the range of eligible managers and simplifying administration - will help investor capital reach the SMEs that need it," Valdis Dombrovskis, a vice president at the European Commission, the EU's executive, said.
Venture capital is considered an important ingredient in fostering innovation but the European industry is small compared with the United States.
Small and medium companies in Europe receive 75 percent of their funding from banks, and have struggled to get capital as the banking sector faced higher capital requirements.
Writing by Gabriela Baczynska. Editing by Jane Merriman