European policymakers have long recognised the important role played by venture capital (VC) funds in financing growth and innovation, and Europe’s VC funds have enjoyed strong support from domestic and pan-European government agencies over several decades. That support shows no signs of waning – even though some UK-based managers have been thrown off course while the European Investment Fund (EIF) decides how to respond to the UK’s imminent departure from the European Union, and has denied or delayed funding in the meantime.

In fact, the UK government appears ready to step into any breach left by the EIF after Brexit. And, separately, it has committed significant additional resources to its delivery body – the British Business Bank – as well as launching a venture capital fund of funds programme. A request for proposals aimed at prospective managers for the first wave of that fund of funds programme is expected imminently. The initiative could ultimately unlock £4 billion (€4.6bn) in additional funding, according to the government’s announcement – although that ambition assumes that government money will also significantly boost private sector funding. Fortunately, it may be a little bit easier to secure matched private funding following recent reports that – contrary to popular opinion – returns from European venture funds are apparently as good as those in the United States (once they are recast to eliminate sample and currency biases).

But the bigger news this month was the launch of VentureEU, a fund of funds programme backed by the European Commission and the EIF. This is a considerable success for industry association Invest Europe, which has actively campaigned for such a programme for many years. VentureEU will comprise six funds that will themselves invest in venture capital funds. Those six funds – to be managed by IsomerCapital, Axon Partners Group, Aberdeen Standard Investments, LGT, Lombard Odier Asset Management and Schroder Adveq – will together get €410 million of public money, and will aim to raise a total of €2.1 billion.

The European Commission is keen to stress that VentureEU is one of Europe’s answers to the chronic under-funding of European VC, despite the considerable government support that the sector has received until now. But it recognises that it will not be enough on its own, and its press release listed several other welcome measures that it has on its agenda. Some of those – such as the liberalisation of Europe’s venture capital regulatory regime (EuVECA), which offers a pan-EU passport to qualifying managers – are already complete. But many other initiatives to improve the environment for the underlying growth companies are a work in progress.

While many world-class technology and other high-growth companies have come from Europe, the US and China still boast many more. Changing that should remain a key priority, and all European politicians would do well to unite behind that goal. Every government proposal – from tax reform to a post-Brexit settlement between the UK and the EU – should be judged (at least in part) according to that yardstick. Specifically targeted measures help, but they need to be underpinned by an over-arching political imperative.