The European Commission (EC) announced a new initiative earlier this week, with the objective of helping startups deliver their full innovation and job creation potential.

Called “Start-up and Scale-up Initiative”, the effort aims to give Europe's many innovative entrepreneurs every opportunity to become world leading companies. The EC noted that while there is a plethora of innovative ideas and entrepreneurial spirit in Europe, many new firms don’t make it beyond critical first few years, or they try their luck in a third country instead of tapping into the EU's potential 500 million customer base.

"Today's local start-ups could become tomorrow's global success stories. We want to help start-ups stay and grow in Europe. By helping them navigate the – often perceived – regulatory barriers to fully benefiting from the Single Market. By making it easier for them to have a second chance, without being stigmatised if their idea doesn't succeed the first time around. And by improving access to funding by boosting private venture capital investment”, Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said.

The initiative brings together a range of existing and new actions to create a more coherent framework to allow start-ups to grow and do business across Europe. This includes improved access to finance and simpler tax filings. In addition, the EC said that it has tabled a legislative proposal on insolvency law, which will make it easier for honest entrepreneurs to benefit from a second chance without being penalised for not succeeding in previous business ventures, as they will be fully discharged of their debt after a maximum period of 3 years.

“Today start-ups do not fully take advantage of the opportunities of the Single Market. Starting and scaling up a company across Europe has to become simpler. Europe needs to become the first choice place for great business ideas to grow into successful companies. This is about new jobs, innovation and competitiveness for Europe”, Commissioner Elżbieta Bieńkowska, responsible for Internal Market, Industry, Entrepreneurship and SMEs, said.

Earlier this month, EC Vice-President Valdis Dombrovskis said that the Commission sees significant potential in technologies such as blockchain, pointing out the EC’s announcement to work with the European Supervisory Authorities (ESAs), the European Central Bank, other bodies, and the Member States to develop a coordinated policy approach that supports the development of FinTech in an appropriate regulatory environment.

With regard to digital currencies, Dombrovskis noted the risk of virtual currency transfers to be used by terrorist organizations to conceal their financial movements due to their anonymity. However, he said that virtual currencies allow for full traceability of transactions as long as tools such as mixers are not used.

“For this reason, it is necessary to allow authorities to gain access to the necessary information (i.e. identities) in case of money laundering or terrorism financing”, he said. “In the proposed amendments to the fourth Anti-money Laundering Directive (4AMLD)(2), the Commission is not putting forward any measure regarding the blockchain technology but is addressing some key players that are fully identified as companies providing the targeted services — they are not codes. Software or application providers for instance are not targeted by the Commission proposal.”