“Europe urgently needs a radically new financing model”

A conversation between the initiators of Future Europe, Oliver Fiechter and Thomas Sasse, Managing Partner oikon LAW and Louis King, CEO First Boston Group*

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Oliver Fiechter: Thomas, Louis, Future Europe is stepping up to provide European SMEs with productive capital. What do you think is the relevance of this initiative?

Thomas Sasse: It’s quite clear that Europe is shackling itself and blocking its own economy. While the USA and China are strategically building up capital, we are sealing  our SMEs with Basel III and Basel IV. It’s grotesque: we have the most innovative SMEs in the world, but instead of unleashing them, we are slowing them down with bureaucracy and credit restrictions. It’s like starting a global race with the handbrake on.

Louis King: From a global perspective, it is clear that European SMEs often do not have the same financing options as their American or Asian competitors. The capital market in Europe is heavily bank-centred, while alternative financing instruments play a greater role in the USA and Asia. Future Europe can build a bridge here by establishing innovative financing mechanisms that put SMEs on an equal footing with international players.

Oliver Fiechter: Who benefits from the current system?

Thomas Sasse: The big banks and institutional investors who are benefiting from the credit crunch because they can secure market share. Who is suffering? SMEs, the real engine of innovation in Europe. The absurd thing is: we have enough capital, but it is not flowing to where it creates growth. The result? Europe’s companies are losing out worldwide.

Oliver Fiechter: You are proven financial professionals with a background in investment banking, what are your concrete proposals for solutions?

Thomas Sasse: We urgently need a radically new financing model: Future Europe. A platform that channels capital flows directly into productive investments instead of channelling them into the regulatory millstones of the banks. The ECB has infinite liquidity  reserves, but instead of pumping the money into share buybacks and bloated financial products, we should use it for real value creation. We need a European answer to the US capital market.

Louis King: That’s exactly where we come in. The traditional lending mechanisms of European banks are not designed to adequately assess innovation risks. Private debt, on the other hand, follows a different logic: it analyses the long-term potential of a company and finances viable models instead of relying solely on short-term collateral. The The Kipuka treasury model is the perfect lever for this: it utilises proven mechanisms from the Juncker Plan* and transfers them to SMEs by systematically leveraging capital through private placements.

Oliver Fiechter: We have jointly developed the “Kipuka Treasury Model”. How does it differ from traditional financing instruments?

Thomas Sasse: The Kipuka Treasury Model is an innovative financing architecture that enables capital to be allocated independently of banks. It combines private investment with structured financing mechanisms to provide SMEs with access to capital that is not tied to traditional credit restrictions. The approach is based on risk sharing and leverage, which utilises capital more efficiently instead of devaluing it through bureaucracy.

Louis King: The cooperation between the Swiss Kipuka Investment Company and First Boston is particularly important. This partnership makes it possible to distribute capital more efficiently and give European companies access to international financing models. Kipuka brings private debt expertise and European market access to medium-sized companies, while First Boston taps into a global investor base. This synergy creates a revolutionary financing model for SMEs.

Oliver Fiechter: What legal form do we want to give Future Europe?

Thomas Sasse: Various options are currently being analysed. Everything is being analysed, from a cooperative to an association to a corporation with its own Future Europe Investment Fund. The structure should be in place by the end of March 2025 in order to achieve the greatest possible impact for SME financing.

Oliver Fiechter: Future scenario 2035 – where will Europe be without a radical change of course?

Thomas Sasse: Europe is becoming a club of economic nostalgics. We look admiringly at the tech giants from the USA and China, while our own innovators are held back by credit restrictions and tax hurdles. Our talents are emigrating because they have no chance here. If we don’t  this madness, Europe will become an economic museum with fond memories but no future.

Louis King: The European financial system is sluggish, risk-averse and hostile to innovation. If we don’t radically change course, Europe is in danger of degenerating into a huge economic museum, while the future is being shaped in the USA and Asia.