Chat with outgoing EIF Deputy Chief Executive, Roger Havenith

2024 marked the EIF’s 30th anniversary. Throughout the year, we’ve been looking back at various aspects of our work, some highs, some lows, some firsts, some lasts, but all of it bold. And one of the people who has had a front row seat is surely Roger Havenith, our outgoing Deputy Chief Executive, who has been with the EIF since 2016.

Roger has overseen, driven and experienced so much of the change that has characterised the EIF during this period that we felt we couldn’t let him go without some reflections in hindsight. We caught up with him just before he left to get his thoughts on EU financial policy, the role of the EIF, and where we should be heading next.

SME to mid-cap

“When I started, we were more like an SME. Today, with more than 700 staff, we’re more like a mid-cap,” Roger says.

“I think the organisation has come a long way. It’s an organisation with people — very competent people — who translate policy into financial instruments. The Commission is a policy shaper, and the EIF is a policy taker. That requires some translation to turn the policy objectives into effective financial instruments. Back in the day, I think that, at the EIF, we were more mechanical, almost like we were in the machine room. But things have evolved in a very positive way, and today, we’re much more focussed on the policy angle of our work. The public policy goals are now our starting point and we speak the same language as the Commission. At the end of the day, you could say we’re better translators.”

Financial instruments: fringe to mainstream

Much like the EIF, financial instruments themselves have come a long way too in the course of Roger’s 35-year career at the European Institutions. “We initially had one financial instrument, with a modest €23m budget spanning across several years. I actually had to bury that eventually,” he adds, ironically enough, having spent the rest of his career building them up. “Financial instruments used to be a niche thing. Nobody really understood what they were or how they worked, there was no financial regulation or anything like that.” But today financial instruments are mainstream, scaled up to a multi-billion euro undertaking with a very active role across a wide range of different policy areas, from energy to agriculture, employment to environment and social policy, maritime and infrastructure.

“I think we have changed the way the EU budget is being spent, achieving much more than just grants. You simply cannot achieve the same outcomes relying only on grants. Financial instruments are now an established and effective policy tool that complements grants. And today, there’s a community of officials across not only all Commission DGs, but also in the capitals, that understand financial instruments and their potential. Ultimately, it leads to a more efficient use of the budget — and for me, in all humbleness, I think that’s my greatest contribution across my career.”

A long-term vision for Europe

With budgets increasingly strained, competing priorities, ageing populations and new challenges on the horizon, a more efficient use of the EU budget is paramount. Even more so in a political climate in which national governments are reluctant to boost their contribution to Brussels. Roger puts this into perspective: “We have to put ourselves in the shoes of the Member States. They themselves are facing difficult budgetary constraints too, and they have to answer to their electorate. They need to deliver in a short time-frame. Nevertheless, at the same time, what we need is a longer-term vision that transcends the short term of any given government. The EU can provide that longer-term vision, and this is already in place in economic policy coordination for example, or if you look at the ECB and the Euro.”

Who does what

This relates to the division of labour. The EU cannot and should not be responsible for everything. Many things are best addressed at national level, and conversely, many others at EU level. This applies equally to financial policy. “We need to clearly identify what’s best done at EU level and what’s best addressed at national level, for example through national promotional institutions,” Roger adds. “Draghi was very clear about this, explaining how certain challenges like defence, security, and innovation can only be overcome at the EU level. We need a clear roadmap on how we’re going to address the €800bn funding gap, knowing who does what. I think that limited EU resources should be focussed more on higher risk areas, like financing innovation. The more plain-vanilla instruments for financial support to SMEs are perhaps more likely to be deployed at national level in the future,” he says. “We need to focus EU instruments on the next generation of industrial players, actors of a certain size which can guarantee a healthy spill-over effect on other innovative businesses in the industries of tomorrow. And I’m convinced that that’s best done at EU level, with a Europe-wide perspective.”

Supporting champions

One such example is the focus on the scale-up gap, which has always been a top priority for Roger: “Identifying the scale-up gap and pushing for the creation of the European Tech Champions Initiative (ETCI) has definitely taken up a big chunk of my time. It’s a big step in the right direction to keep Europe competitive.” Looking across the pond, but also eastwards, the competition is stiff, the stakes are high and there is little time to waste.

“The innovation gap is significant and it’s not just a question of funding. It’s about the risk-taking ecosystem, the culture, the role of foundations and the hubs that bring together academic research and entrepreneurs.

In Europe we replicate several hubs rather than specialise — there’s fragmentation. We should reflect on this and try to streamline rather than replicate. The other thing that needs to be done is bring in the private sector. European pension funds are currently spending less than 0.02% of their resources on venture capital, and a lot of that in the US. Our job is to convince them that we can offer an interesting opportunity. We need to intensify the dialogue with them to see what we can do to make investments in European VC more attractive. Achieving long-term, sustainable support for ambitious businesses to scale can only be done with the active participation of the private sector. And it won’t happen overnight. It’s a long game, but we need to invest in it now and provide the support that good companies need so they can grow and flourish right here in Europe without the need to seek financial support elsewhere.”

An EU Fund for tomorrow

Driving that effort from the standpoint of public institutions, Roger sees an important role for the EIF and EIB Group (EIBG) but calls for more ambition: “The ETCI has been key, but it’s crucial at this moment that the EIBG continues to work closely with policy-shapers (EC, EP, Member States) to come up with even bigger initiatives that can help us address key challenges in an efficient way. As translators, we are well-positioned for this dialogue. We need to look at the needs across the whole funding chain, putting together an EU fund that will cover the needs of tomorrow. The Solvency Initiative embodied some of these ideas but we didn’t manage to convince the Member States. Looking back, that’s probably my greatest regret. Yet the challenge is still there and we need to seize the upcoming opportunity of the renewal of the EU budget to push for an umbrella initiative that will target all the stages of business development, offering continuity in financing. I really hope that this will be pursued and that we will see a sizeable future fund in Europe with critical mass. active involvement of the private sector, and market discipline built in through the intermediation model.”

Reality-check

There is clearly a strong drive and conviction in his thoughts about EU financial policy, and this is something that’s also reflected in the way he has gone about his career:

“I began my career at a start-up in the US and I think that entrepreneurial experience has followed me throughout my time at the institutions. It’s important to understand how start-ups work — especially if you’re dealing with financial policy.

It helps you appreciate, for example, the notions of proportionality and not over-burdening small businesses with heavy requirements. Proportionality is key. We need to stop gold-plating requirements. Adequate requirements, sure, but proportional requirements. I would even consider a one-in-one-out approach to new requirements, whereby for every new requirement, an existing one should be dropped. Taxpayers’ money needs to be managed efficiently and effectively — that’s the starting point. But we need to look beyond controls and checks and focus more on performance, on outcomes, outputs and actual, real impact.”

Wrapping up & starting up

Roger closes our conversation with a word of advice on career management:

“Whatever you do, it’s important to be open and flexible and seize opportunities when they arise. It’s good to have a background in a specific field, but it’s unlikely that you will start and finish in the same area, so you need to be open-minded, not hesitate to change direction and make the best of it. I couldn’t have told you how every step I made was going to come in useful later, but I can assure you now that it did. Having gone from a start-up to the institutions for 35 years, I’m now going back to start-ups, and starting my own company.”

We wish him the best of luck.