Finnish kit vendor Nokia has been granted a €500 million loan from the European Investment Bank to help with its 5G R&D efforts.
The EIB is part of a larger ecosystem of pan-European financial services bodies that allocate public money in order to pick private-sector winners within the bloc. The over-arching concept is the Investment Plan for Europe, which the EU fawningly refers to as the Junker Plan after its dear leader. Within that is yet another group called the European Fund for Strategic Investments, which is apparently ‘supporting’ the EIB in handing over this cash.
The terms of the loan are unstated (Nokia says it ‘extends its debt maturity profile’), but are presumably more benign than just going to the open money markets which, of course, Nokia is free to do whenever it needs a few euros to help it with its 5G R&D efforts. For the EU this is an easy way to demonstrate it’s supporting 5G in the European bloc without actually doing anything, so it looks like a win-win for everyone except tax-payers who would like to see their cash spent on other stuff.
“5G is happening fast, faster than most people even expected,” said a startled EIB VP Alexander Stubb, who is responsible for lending in Northern Europe, which is apparently very different from lending in Southern Europe. “It’s anticipated that it will enable entirely new business cases, while dramatically enhancing existing wireless applications. I think bringing 5G to the market will definitely improve people’s lives, as the motto for the EIB’s 60th anniversary states.”
“Ensuring that Europe embraces and benefits from new technologies requires sustained investment,” concurred EC VP Jyrki Katainen, who is responsible for jobs, growth, investment and competitiveness. “That is where the Investment Plan for Europe can play a crucial role. I am delighted that, with today’s agreement, the Plan is contributing to Nokia’s research and development activities across multiple European countries to advance the development of 5G technology.”
It may be a coincidence but Katainen is Finnish. It may also be a coincidence that the last press release issued by the EIB before this one was on 16 August and entitled ‘EU funding for growth of Finnish companies’. “I am delighted that, with today’s transaction, the Investment Plan will allow Finnish firms to benefit from EUR 100 million in financing opportunities,” said Katainen at the time.
“We are pleased to land this financing commitment from the EIB, who shares our view of the revolutionary nature of 5G – and the realisation that this revolution is already underway,” said Nokia CFO Kristian Pullola. “This financing bolsters our 5G research efforts and continues the broader momentum we have already seen this year in terms of customer wins and development firsts, supporting our relentless drive to be a true leader in 5G – end-to-end.”
If this sort of thing belatedly makes Europe more competitive in 5G then it’s hard condemn, but there’s something unnerving and protectionist about Europe picking private sector winners within its bloc. And what about Ericsson? Sweden is also a member of the EU but, crucially, not the eurozone, having decided to cling onto the krona. The process of picking winners is inherently discriminatory and you have to wonder whether Ericsson is being punished for Sweden’s currency defiance.