Episode 19: “Ask Me Anything” – Live at FI Campus 2024

Introduction

Welcome to our listeners to this fi-compass Jam Sessions podcast, which is being recorded live from FI Campus 2024. On the theme "Ask Me Anything" with DG REGIO and EIB experts. My name is Desmond Gardner and I will be your moderator today. Our speakers have bravely agreed to try to respond to any questions raised this afternoon from our audience, and we also have some questions which were raised by participants when they registered for the event. So let me introduce our speakers today from DG REGIO's Financial Instruments and Relations with International Financial Institutions Unit. I am pleased to welcome the Head of Unit, Jonathan Denness, and Deputy Head of Unit, Oana Dordain. From the EIB's Financial Intermediaries Advisory Division, we have the Head of Division and Head of the Climate and Urban Unit, Frank Lee, and Emily Smith. Finally, we have around 70 or so people here in the audience today. Welcome, everybody. 

We will try to structure this discussion around some topics initially, and we have some questions that were raised in advance. Then we'll invite follow-on questions from the audience on the same topic. If you have a question, please raise your hand and say who you are beforehand. 

I would like to invite Angelina Todorova, the former Deputy Minister of Regional Development and Public Works in Bulgaria, to ask the first question. Angelina.

Thank you, Angelina. Oana?

Oana Dordain: Thank you very much for the question. Indeed, I think we managed to make a big step to make them flexible already, as we heard earlier today. I think we can do much more because imagine a world where you do not have so many rules for grants and financial instruments, but we focus on results. If the direction of the Cohesion Policy will be to focus on results, we will concentrate on what we want to achieve and not how. In 2014-2020, we had these rules for grants in order to avoid misuse, especially for grants used under financial instruments. That's why we have these limits and justifications. If in the future we will concentrate on what we want to achieve, and for example, we say we want to achieve a leverage of four for energy efficiency investments, I think it will be difficult for national authorities to do this without a financial instrument. For sure, we will not need these cumbersome rules for specific sectors and situations anymore. Let's see how things will evolve, but this what we are thinking at the moment.

Thank you. Frank, maybe turning to you, how do you think combinations with grants and FIs can be made easier?

Frank Lee: Well, first of all, I was impressed by Oana's answer. Actually, it's quite futuristic, I would say, and hopefully that is the direction we're going to take. That would be great. Obviously, we've developed a lot of material through fi-compass on this particular topic, which we knew would be a game changer when we started the new programming period. But we also knew that the devil would be in the detail, as I always say. We are working on this, and it is a work in progress. We will find more challenges as we go through implementation, but I think there is a willingness to make this work, and therefore, solutions will definitely be found. Some of these problems are already out there, and we know about them. They were discussed earlier today in the session. State aid is one of them. But I think the most important thing for the next period is to make sure that these fundamental decisions are made up front about what we use grants for, what do we use financial instruments for, and what do we potentially use combinations for. The biggest threat to the success of the combination is the instrument that comes along with a 100% grant. We talked about that today. We need to make sure that those rules are set out up front and that all the funds play by the same rule book. Then, I think the other stuff will flow.

Thank you, Frank. Very interesting.

Emily, we had a related question from a participant during registration about how we can provide more flexible financing. Are grants the key to this?

Emily Smith: I think building on what Frank and Oana have said, the combination of financial instruments is definitely the way to provide that flexibility. I think, especially given the new CPR and the ability to set the maximum level of grant at the overall financial instrument, it gives managing authorities the potential to have relatively high levels of grants where there are deep market failures and to adjust the grant products to best respond to the market. So, I think combinations, for me, are definitely the way to go.

And Jon, your thoughts on flexibility and grants and financial instruments?

Jonathan Denness: I'd like to challenge the question a little bit and turn it into not how can we, but should we? Flexibility comes at the cost of complication, and the rules become more complicated, the more flexible they are. It's not, in every case, just 99.9% of the cases. So if you want flexibility, it’s likely to be, paradoxically, more difficult to implement because the rules will be more complicated. We are often told by the Commission, you should simplify the rules. That’s fine. So we can simplify the rules. And that creates rigidity. Flexibility, for me, is something that you need to think very carefully about before asking this question. But I agree with Emily, combinations of grants and financial instruments can be a part of this flexibility. We’ve seen this afternoon people talking about energy poverty. The combination of grants and financial instruments enables you to tackle energy poverty really effectively. So, flexibility can be provided through grants, but again, be very careful about how you construct it.

Thank you, Jon.

Angelina, maybe I can come back to you. What are your thoughts in terms of the responses from the panel?

Angelina Todorova: Thank you. I agree with what was said by the Commission that there is already additional—not flexibility- but freedom for the managing authorities to choose one operation or deal with a combination in two operations. I hope the direction is right. What I heard is really, satisfactory- a little bit futuristic, but with all the risk management also mentioned at the end. So thank you very much for this, we are looking forward to continuing to work with combinations.

Thank you. Is there anybody else in the audience who would like to ask a question or make a comment on the issue of combination of grants and financial instruments? We have a question there at the back. Please say your name and where you’re from and then ask your question. Thank you.

Indeed. Oana, we’ve done a lot recently on audit methodology. Do you want to comment?

Oana Dordain: Yes. So we started this process three years ago, maybe. And for sure, it’s not ready. And there are still colleagues from audit authorities asking if they can check the invoices for the grant component and so on. We know that despite all our efforts with our colleagues here, it's not done yet. But our thinking for the near future would be maybe to engage directly with the audit authorities and to go to Member States to have such seminars as we had here in Luxembourg, in English.

I think it will be much more valuable if we manage to go there, to speak their language and to preach, I would say, the audit methodology, which is clear on this subject. So there should be no confusion or discussion about how the grant should be audited. But we know that mentality changes last, so we should engage. If you have specific problems in your implementation, you should let us know and try to engage with us and with the audit authorities. We are there to help.

Jon?

Jonathan Denness: Yes. Very good question, and two things. Firstly, be very, very strong with the audit authority. The new rules are very simple. You use the financial instrument rules; you audit according to the financial instrument rules, not the grant rules. You don’t have to mix them up. And secondly, if despite being strong, you have problems, we’re on your side and we can come and help.

Thank you. Anybody else have any questions or comments, or should we move on? Yes, please.

Oana?

Oana Dordain: We were discussing earlier in the seminar to be simple, to do things simply. So I think to have discretion for the fund manager or financial intermediaries to decide for each case how much grant they should give. It's a big responsibility for them, and I'm not sure they will take it on board. So I think you should fix some rules from the beginning in the financial instrument set up how much in line with the State aid rules and this will not change after, from a State aid perspective. It cannot be controlled based on invoices or whatever by the audit authority. So, the percentage as such is set up when the loan is given. The controls are done at that moment that the investment is eligible, the final recipient is eligible. But to modulate the amount of grant on conditions which are not clear for fund managers, you should be very careful because it can give rise to interpretation and audit discussions. The easiest, from our perspective, would be that you say for certain types of recipients you have 10%, 15%, whatever  is needed. And you go with this with a standardised approach for everybody and of course, you can modulate it based on the targeted final recipients. But the rules should be really not subjective and objective (but) clear for everybody, because if not, it will be very difficult to implement. And the controls, as I said, are done the moment when the loan is given, and it should stop there.

Frank Lee: If I may add, I fully agree with what Oana said and also establishing all of the rules up front and also doing this in the ex-ante assessment, for example, I think it’s also useful in terms of even getting the State aid clearances sorted out up front as well, so that you're not looking at this transaction by transaction or operation by operation. You're looking at this in a whole, in its holistic form. You're saying this is the target, this is the percentage of grant, and you're getting this all cleared up front. So it becomes much easier and much clearer for the intermediaries and the final beneficiaries to then go ahead and implement.

Thank you. Hopefully that goes some way to answering the question. Okay, so let’s move on now to the topic of smart and sustainable growth. The next question is from Martina Bartokova. Martina is a consultant at EY in the Czech Republic. Martina, your question.

Thank you. Emily, to you.

Emily Smith: I'll give it a go. Thank you. So you heard earlier that we’re very much doubling down on our efforts in relation to energy efficiency and renewable energy. But as you rightly say, it’s a very broad investment area. So in terms of other topics, on Thursday, on day three of the event, you will hear about our new equity financial instrument model, which I think has huge relevance for the sector that you mentioned. We’re also actively, as EIB, exploring housing as one of our key priorities. As we move forward, it’s one of the areas that we want to try and explore the use of financial instruments.

We also have the existing new European Bauhaus territorial development model available on the fi-compass website.

So I think between the energy efficiency model that you’ve heard about this afternoon, the equity model that you’ll hear about on Thursday, and the existing New European Bauhaus model, I think you hopefully will have some good inspiration there for those sectors.

Thank you, Emily. And maybe I can add to the people who are listening to the podcast who didn’t make it to FI Campus. All these materials will be available on the event page on our website, so there’ll be lots of rich information there. Jon, would you like to comment about the future of smart and sustainable growth?

Jonathan Denness: Emily has said nearly all of it, which is terrific. In terms of looking for inspiration elsewhere, we had a terrific workshop in Athens earlier in the year, which is on the fi-compass website, where we had a very rich discussion with final recipients of equity investments and very innovative companies and very, very successful ones in Greece. And then you talk about the future. As I said earlier, we want to focus on the future. As Oana said earlier, we’re looking at repaying by achievements of targets, rather than through actual expenditure. And I think we’re going to use every way we can to make sure that both SME and energy efficiency and following the session we’ve just had, renewables as well. There has to be a big presumption that you use financial instruments for those sectors. But if I may, under the control of you Des, what would be your wish list for the future for us?

Perhaps people can raise their hands. Martina, maybe you go first. And then if anybody else wants to come back with some feedback, that would be great too. Martina.

Martina Bártíková: I would say maybe, from the point of view of someone young living in Central Europe, to try to connect cities inside, maybe with some project not only connecting or trying to improve the energy or the part of the investment into the energy sector and industrial aspects, but maybe more into the cities. Think how to connect the cities, not only as it is in most of the cities divided into the old generation living with some condition which they are used to and the young that want to change it. So maybe try to look at it this way and also from the sustainable point of view. My way of living is such that it is possible for my child and future generations to have a good place to live. So not only looking at the industrial sector, but more into the city and also maybe social economy.

Thank you, Martina. 

Would anybody else like to ask a question or make a comment on this topic?

Frank Lee: Just to pick up on that topic, energy efficiency in housing, for example, is very interesting. This is not just an environmental discussion. If you look at the examples that we have of who is using it, particularly in central and Eastern Europe, housing, we talk about apartment blocks. In apartment blocks, you have rich people, you have poor people, you have all sorts of social dimensions, such as old people and young people. What we’ve experienced is that the energy efficiency renovation project is not just about energy savings; it’s also about quality of life. It gives people opportunities to, for example, work at home. It can be about job creation in terms of how many jobs are created doing these kinds of projects. The value of the euro spent versus the number of jobs created for energy efficiency is one of the highest, certainly compared to renewables, for example, it's a much more efficient form of investment. Last but not least is the social dimension. Jon mentioned it already, energy poverty. People living in these apartments, energy efficiency obviously helps them a lot. There are all sorts of dimensions to a particular project like energy efficiency. Our job collectively is to raise awareness with citizens that these are all the multiple benefits that you get from doing this. This is not about whether you're using financial instruments or grants. This is good stuff that we all should be doing.

Indeed. Okay. Thank you. Jon, would you like to comment?

Jonathan Denness: One more thing. I heard a little bit of a plea for good housing in your remarks. I think you will see once the new Commission is in place and we have the new regime, you will start seeing things on housing. There is a general recognition that housing is a big problem in many parts of Europe. It's a different problem in each city and each Member State. But yes, we are doing some thinking about what we could do about that.

Thank you, Jon. Aleksejs, did you want to ask a question?

Frank Lee: Yes. In the sense of what you highlighted. If you're having one borrower, that is, of course, more difficult to do, but that's not the only model being used. There are other ways in which you can combine the grant, perhaps in a less direct way, of course. We don't have enough time today to go into some of the details, but it depends on the situation. In your situation, as you say, it may be more difficult to do when you're having one loan, one counterpart representing all these different apartment owners in their different forms. But there are other models that are out there that are doing things a bit differently, where you can have this differentiation.

Thank you, Frank, and thank you for the question as well. So let’s move on to the third topic, which is a topic I know is on the agenda of many people dealing with financial instruments. It's from Màrc Bàto from the Ministry for Public Administration and Territorial Development in Hungary. Màrc?

Thank you, Màrc. Oana?

Oana Dordain: Thank you very much for the question. We are in a situation where we have financial instruments under Cohesion Policy. Whatever is applicable to Cohesion Policy will apply to financial instruments. The problem in 2021-2027 was that we approved our CPR when the DNSH was put on the table under RRF. In reality, we had rules under Cohesion Policy that were not aligned with the rules that came later. We tried at the last minute to align them somehow. So there is a lot of unclarity. We try to solve this problem and come out with some rules. I can tell you that we are discussing a lot in the Commission how we should align now, not only for Cohesion Policy, but how to align the DNSH principle for all funds for RRF. So I can understand it's not easy for you to deal with things for which even in the Commission, we are still discussing.

Coming back now to financial instruments. We have the chance that financial instruments are considered at the highest level, which can be done through the ex-ante assessment. It means that for DNSH there are some of these horizontal principles which are applicable at the level of the financial instrument, at the level of the investments like DNSH or climate proofing. So we said this time round, if there is something in the programme which indicates that further assessment should be done, we will do it at a lower level. If not, we stop at the level of the programme. For climate proofing, it is different because there is a certain type of investment which has to be taken after when we speak about the Charter of Fundamental Rights. I think this is a problem at the level of the Member State, and I do not see how this can be applicable to the financial instrument operation as such because it should be dealt with at the level of the Member State. Regarding the smart specialisation strategy, this is a question for the managing authority and should be dealt by the managing authority when the financial instruments are set up. If they have to align with the smart specialisation strategy, they will have to set up financial instruments, which by default would be in line with the strategy. It is very difficult to ask a bank, a private bank, to assess criteria which are not in their competencies. So I think we should put each criteria at its level and translate down to fund managers, to banks, and to final recipients what can be really in their hands to be assessed. We will continue to have all kinds of these criteria, and we hope for the future that we will have some general understanding of what it is, the DNSH and how to deal with these issues. We should also be careful to adjust these rules to the financial instrument specificities, because not everything can be dealt with for financial reasons as they are dealt with for grants when the managing authority has the responsibility and decides to whom the funding is given.

Thank you, Oana. Frank, maybe you can share your perspective.

Frank Lee: I don’t have much to add. I fully agree with what Oana said. DNSH, as Oana mentioned, is something that came after the CPR was agreed. It's still a moving target. There are talks now about streamlining and harmonising across the funds. There are also very interesting discussions about how this can be much more simplified for SMEs in particular. You'll hear about this on day three. We have DG FISMA colleagues and DG GROW colleagues coming to talk to us. This is really at the top of their agenda. So, save your questions for them. But I think as you’ll hear, this is not being ignored. It's being dealt with in a very practical way. It’s just that we might have to wait for this to be done, which may not be suitable for getting implementation done on the ground, but at least you’ll be able to see the direction of travel and maybe get some reassurance.

Thank you, Frank. It’s good to know it's developing. In the meantime, we need to get on with implementing financial instruments. Màrc, I can come back to you. What’s your response to that? Do you have any comments? And if anybody else would like to add something, please do raise your hand.

Màrc Bàto: Yes. Thank you for your answers. I fully agree with these directions. From a theoretical point of view, I’m absolutely in line with this approach. Let’s strengthen each other in the application of this because in the application, we have already experienced some concrete problems. But we have to distribute this approach and find a commonly applied approach to these issues. I will go to the third day meeting to get even more information about this. Thank you.

I guess that information will be available on the website as well for the listeners to the podcast. Did anybody else want to make a comment on this topic? Looking around, does anybody want to comment? No. Okay. Angelina? Thank you.

Angelina Todorova: Very short comment. I think Frank and Emily are being very modest here because I think the more policy issues are implemented in a financial instrument, the more the need for advisory is very visible. With all these horizontal issues, with all these additional tracking and earmarking, we shouldn’t forget the role of the advisory. The Member States need it, the managing authorities, the holding funds when they exist, the financial intermediaries, and of course, the final recipient. So, never forget it.

Jonathan Denness: And the Commission needs it as well.

Indeed. Thank you for the plug, Angelina. 

Maybe that’s a good moment. I can mention we did have a fi-compass Knowledge Hub on this topic recently, and we will be publishing something probably just after the summer, which should be of interesting reading for everybody who’s trying to deal with this as well. Thank you for your comments.

That concludes our sort of pre-cooked part of the session. Now it’s over to you. The session is an "Ask Me Anything" session. It is your opportunity to ask the panel anything you would like. Maybe if anybody has a question they would like to raise their hand, we can get a microphone over to you. The gentleman in the middle.

Thank you, Ernesto. Frank, maybe I can come to you about that in agriculture.

Frank Lee: We’re not covering the agricultural financial instruments in FI Campus this year, but that’s not to say that there’s nothing going on there. The use of financial instruments under the EAFRD is actually growing. It's not at the level that we see in eRDF, but it also started out relatively late. We’ve done a lot of work with DG AGRI to look at how we can promote more financial instruments. You talk about energy efficiency, climate, and the taxonomy, which doesn’t yet apply to agriculture. I don’t want to get into that debate about why that is; you can speak to the politicians. However, as EIB, we look at agriculture and see a number of activities in agriculture that we consider to be green, and we are prioritising this kind of investment. We’re talking about energy efficiency measures, renewables, solar panels, and adaptation, which is a very important topic in agriculture. For those of you who may have read publicly available information, our President has made agriculture one of our top eight priorities at the EIB.

We are thinking about more products and more financing that we will be able to do in that sector. Our sister organization, the EIF, is already doing a lot in this sector. So just to say that this is not being ignored, and I think a lot more could be done. But you are fully aware that this is a relatively political debate.

Thank you, Frank, and thank you Ernesto for the question. Do we have any other questions? Yes, that lady.

Thank you, Patrycja. Good question. Jon, maybe could I ask you to comment on that first?

Jonathan Denness: Yes. I would go into the headmaster’s office or the headmistress’s office and say if you make your school more energy efficient, you will save money on your energy bills. Therefore, you will have the money available to repay your loan. If there are deeper renovations that can be done in combination with a grant or if there are particular economic circumstances that make it difficult, that can be done in combination with a grant, so a combination of grant and loan. The other key point you need to think about is that a loan will be given by a bank. Therefore, you are essentially outsourcing a lot of the economic viability testing of the investment to the private sector. The private sector will try to do things as efficiently as possible and at as low a cost as possible. So, a loan will be more efficient than a pure grant. But the argument for the headteacher sitting in their office is that you’re going to save money and you’ll have money available to repay the loan.

Thank you, Jon. Emily, I think the question also talked about small local authorities as well.

Emily Smith: Yes. I think as Jon said, I’d make the financial instrument product as attractive as possible. As part of that, I would offer the headmaster some technical support to help him design his project. Then I would turn off all of those incentives in relation to the grant. I’d make it as difficult as possible for him to access the grant. Really facilitate the financial instrument and make the grant very, very difficult. If you manage to convince him to take the financial instrument component, you can use your grant for the projects that aren’t cost-saving and aren’t revenue-generating. Hopefully, that’s a better story for the mayor overall.

Thanks. Frank, do you want to add to that?

Frank Lee: What I would do is sit down with the mayor and understand from the mayor what all the investments are that he has to do over the next three, four or five years. Get them to realise that if they want to do all of these investments, they’re not going to be able to do them all with grants because there aren’t enough grants available. Through that process, you then move on to a discussion about which ones generate revenue and which ones save costs. This is coming back to what was already said. If you have projects like that, knowing that you don’t have enough grants to do all of them, maybe look at doing those ones with financial instruments. If you want a little bit of incentive, do it in a grant combination. The mentality should not be, "Oh, I’m being forced to take a loan, when there might be some grants out there that I’m not getting". This should be about, there are only so many grants that can be used. You should obviously get as many grants as you can, but you’re not going to be able to do everything you want to do with grants. Most mayors know that. They should be thinking about those other projects they want to do and whether they need grants for all of them. No is probably the answer. Get them to realise for themselves that certain economic activities they support, where there is income generation or cost savings, are the ideal projects for financial instruments.

Thank you, Frank. There’s a mayor in a small local authority in Pomorskie who’s getting some very good advice right now. Oana, would you like to come in for the final word on this?

Oana Dordain: All these are rational arguments, and I was giving them to many people, and they told me it doesn’t work. I think the problem to convince a mayor may not be the problem. I think it comes from a higher level. Why does the mayor have the possibility to have a grant for something where he should not have a grant? If he doesn’t have the choice to have a grant, he will take a loan at 0% and see the advantages. This is a position we have to think about ourselves. We discussed earlier about the political steering and political will. If there is a political will to achieve something, the mayor should not have the choice. It’s part of our reflections for the future. For the moment, try with rational arguments and maybe with figures. Show how much you achieve and how much you will have in the budget. Maybe for the future, you can think about more radical solutions.

Thank you. I don’t know if we can get a microphone back to Patrycja, and maybe you can say what you think in terms of the responses. What’s your view from where you are?

Patrycja Szczygiel: These are very good pieces of advice, we tried that and we tried all the rational thoughts when talking to local authorities. We try to avoid cannibalism, trying not to get the grant and the loan for the same issue, but still, we are the most hated people in our region because with the low budgets, especially with small local authorities, where they have many issues to deal with and small amounts of money in the budgets, they will always choose the grant. We know it’s a matter of a mentality change. But still as a managing authority, we need to follow the N+2 and N+3 rules and all these certification objectives. It is not easy because once we launch a financial instrument for public services, there is a risk that nobody will take it. We have to find the balance between attracting the loans and following the programming rules. It sounds very easy what you say, and we know all the advice, but please feel free to visit our region, and we will organise a meeting with the local authorities to see how it works.

Jon, did you want to say something?

Jonathan Denness: Yes, possibly, we’ve been too rational and not cynical enough. What you might think about constructing is a loan product where the first repayment is the day after the next election.

Thank you. 

Let’s end on a positive note. Congratulations on the very interesting financial instrument. It was very successful in renewable energy that was presented today. Well done.

Do we have any more questions from the panel? We’ve had some very good questions. Yes, question in the front. Please say your name and where you’re from.

Jan, very good question on the transfer of benefit and guarantee instruments. Frank, I’ll come to you first.

Frank Lee: This is also a State aid question, right? There are methodologies that have been established. Our sister organization, the EIF, does this all the time. It’s a bit of an art rather than a science because it’s quite difficult to really quantify the benefits. But the wording is generally around that you transfer at least a substantial amount of the benefit. It doesn’t have to be the exact amount. Essentially, you have to look at the conditions under which the loan would be given without the guarantee. You need to understand how the bank marks up its loans, what the risk pricing is, etc. Then you see how that compares to what they would be doing with the guarantee. You need to do that in a robust way because of course, the banks will play with the numbers. You have to really know what the counterfactual is—what the bank is going to do without the guarantee. There are ways of doing that. It’s not that difficult to do, is the short answer, but you need to do it. If it’s not in the CPR, it’s certainly something in the State aid regulation that you need to sort out.

Oana?

Oana Dordain: It’s a bit like what Frank said—you should care a lot about it because they changed the State aid rules for de minimis. Now you have a specific article which says if the aid is not transferred to final recipients, you have to fulfil these criteria. But it is assumed that if the aid is transferred, you don’t need to fulfil this criteria. It may come that somebody one day will ask how you transferred the aid. You need to have a calculation inside the bank showing how you transferred the aid. We are not bankers here, but if you want, we can try to see with DG COMP some solutions. But I am afraid if we go in this direction, the banks which are doing it already, like EIF, may have problems because they will not fulfil this solution. Best is to define your own methodology to show how you transfer the aid in the best possible way. DG Comp says a full transfer of aid and not an approximate transfer of aid, but I think they are not really able to measure the exact amount of aid. Whatever methodology may work, but from a policy perspective, we are giving public funds. If this public fund stops at the level of the bank, we are not achieving the purpose. We have to see a difference between a loan guaranteed under public funds and a loan not guaranteed under public funds. I’m not a banker but it should not be extremely difficult to say we give a guarantee with no guarantee fee and maybe reduce the interest rate, I’m exaggerating as I’m not a banker so it’s not for me to say. You have to find the methodology for this for sure and keep it in your files for future audits.

Thank you, and thank you, Jan, for your question. Do you want to share how you are approaching this question?

Jan Vankat: The thing is, we are looking for a way to approach it. We are just negotiating it with the Czech Banking Association. We are looking into what are the best practices and what we should follow—whether it should be qualitative or quantitative. We are looking for any hint on how to do it.

Oana Dordain: I think both. You have to find a way to explain both quantitatively and qualitatively. We didn’t work under fi-compass on this subject, but we can reflect on it.

Frank Lee: There are ways in which you can build it into your selection process. You can ask the banks that are bidding for the guarantee to articulate how they are doing things before the guarantee and how they are doing things after the guarantee. Quantify the benefit they assume they’re going to have. You may simply say, we take the bank that gives us the biggest answer because, by definition, you're picking the best in the market. You may say, well, we don’t particularly want to pick that bank because there may be other reasons why you don’t want to pick that bank, but you need to see what your selection criteria are and how you weight them.

Jonathan Denness: If anybody in the room has best practice that they can share with Jan, you’ve got a day and a half to do so.

Did we have a question from somebody up there?

Petr Votoupal: Thank you. You already elaborated on the question. My kind request is to have an off-the-shelf methodology on the subject because it’s a matter of endless discussions. That could be the reason why not to do a financial instrument because you will discuss for months and months and it will not come to an end.

Thank you. Your name, sir?

Petr Votoupal: Petr Votoupal, Czech desk, European Commission.

Thank you. That’s a good example of the theme "Ask Me Anything." Thank you for that. Would anybody else have any questions? Is there a question at the back? No.. Okay, perhaps that exhausted the audience. I’ll maybe just have one last pre-cooked question for the panel to ask before we close, which is about the scope of fi-compass support in the future. How do you see the support we provide under fi-compass evolving to address these new challenges in the future? I’ll start with you, Frank, and we’ll work across the table.

Frank Lee: We’ve talked about this before in recent events about how the knowledge of the stakeholders using financial instruments has clearly evolved and is much more sophisticated these days than it was when we started fi-compass. We need to move along with the times. I think we have already done that to a certain extent. We’re going much deeper into certain types of financial instruments, giving more explanations on how they work, etc. The Knowledge Hubs are a really good format for us to have more in-depth conversations with the stakeholders on the issues. The scale-up initiative that we talked about a lot today is exactly going in that direction. The fact that we offer Member State-specific support—Emily mentioned today we are here to help anyone who wants to take the plunge and do a State aid notification. We love that stuff. We realise that we have to do more specific support but at the same time, we recognise that this is an EU-funded programme that has to operate horizontally, help all stakeholders. It’s a fine balance in terms of how much we can go into specific Member State or regional or financial instrument-specific topics versus everything else. We have lots of examples of common problems, and those are the ones we’re trying to address with the different formats we have.

Thank you, Frank. Emily?

Emily Smith: Could I ask the audience what they think? A bit like "Who Wants to Be a Millionaire?" Frank has covered pretty much all the things I was going to say. Jan’s question was a really good one, showing there was a specific need for some methodology, maybe some templates to help on that topic. But is there anything else like that that’s very specific that you haven’t heard in terms of the pipeline of support that we already have that you think would help? Question back to you. Feel free to put your hand up.

Would anybody like to raise their hand and make a comment about what they would like to receive in the future as they do that? Thank you.

Teja Florančič: Thank you. For me, especially at the phase of starting financial instruments, it would be very useful to have a list of all the instruments across the EU and maybe contacts with some basic characteristics to get in touch with the people who are in charge, for example, to help each other overcome the challenges. So maybe a request for fi-compass to do it in the future. Thank you.

Very interesting comment. We do actually have a list on our website, the country data pages. We include all the financial instruments, including a link which most of the time is accurate, although at the moment that’s from the 2014-2020 period because we rely on the data that is submitted to the Commission. But we should be updating that in the next six months or so. Thank you for that. It’s a really good comment. 

Would anybody else have anything they’d like to add at the moment? No. That’s great. Okay. Thank you. Oana, how would you like to see fi-compass evolve in the future?

Oana Dordain: We are very lucky to have a very good working relationship under fi-compass, and it’s flexible and simple. We can adjust to the needs. If you have needs that come to your mind, don’t hesitate to let us know. We have to start preparing the reflection for post-2027. We will need to start to see how we’ll do financial instruments focused on results. We’ll need to see what are the market gaps in the Member States for SMEs and for energy efficiency. The work of fi-compass will also turn a bit towards the future. For 2014-2020, it was already very valuable. We need to start now to be able to put in place the new programmes. This would be from my side, but we will continue the normal work, and the questions this afternoon were also to see if you use fi-compass and the products we are proposing. I think we will launch a survey also next year. We are quite flexible and we want to reply, really to your needs.

Thank you. Jon?

Jonathan Denness: Thank you, colleagues, for saying everything that can be said, so I’m not sure I have very much more to add. One thing I was reflecting on this afternoon, listening to the two green discussions, was the way fi-compass is organised: It's all about you. It’s not about us. It's all about you. You set our agenda. You tell us what you don’t understand. You tell us what you can’t make work, and we try to react. For me, the big pleasure of coming to FI Campus is the interaction between you, as the practitioners, the people who have to sort out all the problems on the ground, and us, the so-called experts. Sometimes, I don’t feel like an expert at all. In fact, most days, you are the experts. You deliver things on the ground. We are here to help you, in a sense fi-compass is like the white tables we’re sitting at now, it’s for you to draw your pictures on. It’s for you to write your questions on. I think that is the big strength of fi-compass as a whole. It’s about you. We’re here to help you.

Many thanks, Jon. We’ve run out of time. Thank you, everybody. Let me thank the speakers, Jon, Oana, Emily, and Frank. Let me thank everybody in the room for your contribution to what’s been a very interesting exchange over the last hour or so. 

I hope this has been an interesting experience for the listeners to the podcast too. We will be continuing to explore the potential of financial instruments over the next two days at FI Campus. I hope we see you all at fi-compass events in the future. 

Finally, let me encourage everybody who’s listening and in the room today to follow our Jam Sessions podcast series, which is available on your main podcasting platforms so you can be notified of new episodes when they are released. Thank you, everybody, and goodbye.