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Speech - Culture: a smart investment in times of austerity

Commission Européenne - SPEECH/13/771   01/10/2013

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European Commission

Androulla VASSILIOU

Member of the European Commission responsible for Education, Culture, Multilingualism and Youth

Culture: a smart investment in times of austerity

'Ready for Tomorrow? Culture as an Agent for Social and Economic Transformation' conference /Vilnius

1 October 2013

It's a pleasure to be today in Vilnius – a UNESCO World Heritage Site, a former European Capital of Culture and a modern, innovative city.

I would like to thank and congratulate the Lithuanian Presidency for organising this important event.

We are gathered today to take stock of our work on cultural policy across Europe and to discuss how the cultural and creative sectors can benefit from cooperation with other sectors of the economy. We will look at ways to make best use of EU and national funds for the cultural and creative sectors and to facilitate access to financing. More generally, we will discuss how culture can be promoted to the benefit of our economies and our societies.

Speaking about culture's economic role in no way undermines its intrinsic, non-quantifiable value. This double dimension of culture, as a set of shared values and a sector of economic activity, actually lies at the core of our reflection today. It is also the guiding principle for our work at the European level.

As many of you may recall, last year I presented a Communication on Promoting the Cultural and Creative Sectors for Growth and Jobs in the EU. I insisted that culture – which is a public value in itself – has also a huge potential for growth and jobs.

The figures speak for themselves. With almost one million enterprises, the cultural and creative sectors represent nearly 4.5% of the total business economy in Europe. The sector employs over eight million people, mostly in small companies, and provides work to many self-employed persons.

I will use a familiar example to illustrate this point: the European Capitals of Culture.

Becoming a European Capital of Culture sets in motion a long-term process, which may change a city, its image, its cultural sector and its citizens. The economic and social benefits that are generated are felt for many years after the event and spread beyond the city to the surrounding region.

A rise in tourism, regeneration and urban development are just some of the positive effects, not to mention the spill-over effects on other sectors of the local economy.

Also, there is a drive towards more cohesion and intercultural dialogue through cultural activities that reach out to young people, minorities, and the disadvantaged.

Cities like Lille, Liverpool, Sibiu and Pécs can testify to this.

How can we argue in favour of the economic and social potential of investing in culture against the backdrop of the current economic crisis? How can we persuade that public spending on culture is not a luxury, but a smart investment?

'When it comes to the debt crisis', said Umberto Eco, 'we must remember that it is culture, not war, that cements our European identity'.

I would complement that by saying that it is in times of crisis that culture is most needed. Because culture contributes to the healthy development of our societies, it encourages social inclusion and helps fight prejudices, extremism, fanatic and xenophobic behaviours. Culture also contributes to economic growth and job creation. Investing in culture therefore is not a luxury. It is a necessity.

And I deeply regret the sharp cuts of public funding for culture in different EU Member States, especially those subject to surveillance under economic adjustment programmes.

We must however adapt our approach. The times call for smart investments and a long-term vision.

When it comes to the public funding of culture, we need to take an approach that is integrated and coordinated at different levels of governance. We need to re-think the way public funding for culture is managed. We must think "outside the box" to tackle more efficiently challenges such as digitisation and globalisation.

We must take a careful look at the different players such as policy makers, creative businesses and the banks.

Policy makers need to work more closely together at all levels to ensure a regulatory framework that provides incentives for investment and addresses the challenges of the digital era. Policy makers need to find ways to strengthen the financing of activities which bring not only social but also sustainable economic development.

Creative businesses need to develop new business models. At present, the cultural and creative industries depend heavily on their own earnings and public subsidies. This limits their growth, especially in times of fiscal consolidation and general cuts in subsidies.

Financial institutions need to better understand the specificities of the sector. Although they may be aware of the economic potential of the cultural and creative sectors, their needs do not neatly match the traditional financial products that banks offer. Banks lack knowledge about how to assess the assets of creative businesses (such as copyright, licences) and are therefore reluctant to use these as collateral for loans. At the same time, cultural operators are generally reluctant to look for bank financing and that also prevents banks from building up this specialised knowledge.

At EU level, we are trying to address these issues. The new funding period starting next year will see the launch of our new Creative Europe programme. Despite the overall budget cuts proposed by the European Council, we managed to secure an overall increase of 9% compared to the previous funding period.

We have designed Creative Europe to be an effective tool to promote Europe's cultural richness, competitiveness and social cohesion.

I am thankful to the two co-legislators – the Council and the European Parliament – for their constructive attitude during the negotiations. Dear Doris [Pack, chair of European Parliament CULT Committee], dear Minister Birutis, thank you for supporting the main thrust of our proposal.

Creative Europe will be a 'one stop shop' for cultural and creative industries. In order to focus on the respective needs of cultural and audiovisual operators there will be separate sub-programmes.

We are also diversifying our support. The Cultural and Creative Sector Guarantee Facility will complement our traditional support based on grants. Our goal is to give European cultural and creative operators easier access to bank credits.

The Guarantee Facility will provide guarantees to banks operating or wishing to operate in these sectors; it will also help bankers gain the expertise they need to correctly analyse the specific risks associated with the sector.

Of course, Creative Europe will not be the only source of funding for the cultural and creative sectors. Other EU funding programmes will support creativity, innovation and entrepreneurship in Europe: Erasmus+ for education and vocational training; COSME for industries and enterprises, and Horizon 2020 for research and innovation.

The Structural Funds – perhaps the programme with the greatest funding capacity - will continue to be available to the cultural community at national, regional and local level. In light of previous experiences, we have seen that regions which support the cultural and creative sectors in the context of a broader cross-sector approach have met with success. Embedding cultural investments in a broader vision for local development and to be mindful of the economic and social impact of such investments is a key condition for success.

Now is the time to act as Member States are preparing their priorities for the next programming period. Before the summer, I took the initiative to send a letter to Ministers responsible for the structural funds in the Member States, where I invited them to look at investments in culture and creativity in a strategic manner and as part of integrated development strategies.

This requires new intervention logic and, perhaps, a new strategic approach by those in charge for local and regional development. It is not an easy task, but is certainly one worth undertaking.

I hope that the European Culture Forum, which will take place in Brussels between 4 and 6 November, will be another opportunity to reflect on the future opportunities for funding for the cultural and creative sectors and look at ways to complement public funding with new business models and revenue streams. I invite all to participate.

Ladies and gentlemen,

Our joint effort should aim at facilitating the emergence of new creative ecosystems, which can contribute to smart, sustainable and inclusive growth across the EU and its regions.

I am fully convinced that our various discussions, including today's discussion which will be continued tomorrow at the political level by the Ministers, contribute towards this purpose.

I look forward to the positive results of your discussions and wish you an enjoyable conference.


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