In-Company Training Luxembourg: track European institutions
Last week I had the pleasure to attend an In-Company Training, which took place in the small country of Luxembourg and gave me, along with other 15 well-motivated students from Bocconi’s Bachelor and Master programs, the opportunity to visit three European institutions: European Investment Bank (EIB), European Investment Fund (EIF) and European Commission DG ECFIN.
What is an In-Company Training?
In only a few words, an In-Company Training consists in two or three days of presentations in the headquarters of companies, banks or institutions, like in this case. It is an event organized by the Bocconi Career Service, for which you can sign up simply though your you@b agenda. The application process is quite straightforward although there are often some eligibility criteria you need to comply with in order to be considered as candidates, such as being enrolled in a certain year or course of studies and so on. Typically you will be asked to send you CV along with a video interview, answering a few questions aimed at testing your knowledge regarding the topics that will be discussed during the actual Training. Bocconi will then do the screening and let you know the outcome of the selection.
Due to the scarcity of flights from and to Luxembourg, we had been forced to arrive there the day before the actual start of the events, so we had the opportunity to explore the city a bit and enjoy some local food.
The following day we attended a four hour meeting at the EIB with the head of the HR division, who invited along five other guests.
The first one was a member of the EIF and she provided us with useful information regarding the functioning of this institution. The EIF was established in 1994 and its main shareholders are the EIB and the EU member countries. The main function of the Fund is to provide sources of financing to small and medium enterprises using the channels of intermediaries like private banks. Trying to translate this in more concrete terms, we can say that the Fund provides venture capital in order to foster the creation of European unicorns: just to mention some names, it supported startups like Spotify, Joox and Skype. The whole process can be summarized in this way: the Fund raises money from the markets through the emission of bonds, which are rated triple A by the most important rating agencies and are therefore super secure. Then there is a quite rigorous selection process in order to select the projects in which it is worth investing; and afterwards the Fund collects the returns of its investments, which are used to pay its shareholders and debtholders. Hence, as its statute clarifies, the Fund is both mission-oriented like any other institution of this kind, but also profit-oriented.
The second speaker was a member of the operations team responsible for southern European countries, who explained to us the basic functioning of the EIB. It was established in 1958 with the signing of the Treaty of Rome and it is a policy-driven bank, whose major shareholders are the member states, with a distribution of quotas based on specific measures like GDP and inhabitants. The major objective of the bank is long term financing, which is mainly directed towards European countries (90%): so it works basically like the World Bank, but operates mainly in the EU.
It has been outlined multiple times the impact that Brexit will have: mainly the capital invested in the UK will be gradually reduced over time without rolling over in order to avoid excessive losses. It is, moreover, important to mention the essential role of the Bank in the implementation of the so called “EU Infrastructure Investment Plan”, also known as “the Juncker Plan”, which was launched in 2014 with the aim of unlocking public and private investments in the real economy and has more than €315 billion in capital. The program changed radically the mechanisms of access to funds: until recently the Bank used to provide money in the form of grants, while now there has been a progressive movement towards refunds. Basically, they provide financing which will be later paid back, allowing them, therefore, to use this money again in other projects.
In the evening, we were hosted in a local bodega by the Bocconi Alumni Association for a networking event, which was attended by several people now employed in either the private or the public sector in Luxembourg (e.g. the Big Four consulting companies).
We spent the second day of our trip at the DG ECFIN, which is the part of the European Commission that deals with economic and financial affairs.
The commissioner currently in office is Pierre Moscovici, who is about to be replaced by Paolo Gentiloni this November. The offices located in Luxembourg correspond only to roughly 11% of this part of the Commission, while remaining parts are located in Brussels. The main functions of this institution are: supervising the smooth functioning of the Euro as a currency, promoting macroeconomic reforms through, for example, the institution of the European semester and representing the EU in international fora like the IM, G7, G20.
During the morning, we attended several presentations made by members of the different units or blocks, including risk management, operations, treasury and trading. I have to say that the most interesting one was the latter; we were given the opportunity to visit the trading room where ten guys daily allocate €800 million in the market, trying to earn some returns for European citizens. They explained to us a bit about how to read and interpret the different data, how to place orders and the rationale behind their investments. They all outlined that trading at the European commission is not like trading in any other bank: here the objective is not to earn profit per se, but to, first, not lose the capital received from the taxpayers. It seemed that the markets had no secrets at all for these guys.
Regarding the EIB and EIF, there is the possibility to apply to traineeships and graduate programs (these are reserved for people who have already graduated). They are typically paid and last five months and there are two intakes during the year: the first in February and the second in August. In case you are interested, I suggest you to check their website for vacancies because we were told that they were going to post some new ones in the middle of October. They, moreover, highlighted the fact that they consider relevant work experience of three years equivalent to a Ph.D. It is also important to stress that for these institutions, unlike for many others, the traineeship does not imply a full time offer.
The DG ECFIN, in contrast, offers several programs which are available for students (both graduates and undergraduates). We had the opportunity to meet many students currently working there and they all spoke very highly of their positions.
Overall, this In-Company Training was a great experience that allowed me not only to see some of the institutions that are at the heart of Europe, but also to encounter several people with similar interests to mine, who really have been of great inspiration for me. Hence, I encourage you all to challenge yourself to try something similar as new opportunities come along.