15 October 2021

Invest Europe considers implications for the EU financing ecosystem of changes to EU State Aid rules

It is especially relevant from a private equity perspective as it specifies when risk finance aid can be granted to national venture and growth funds or the companies they support.

Last week the European Commission published its draft General Block Exemption Regulation and opened a consultation calling for stakeholders to comment on its proposal.

The Commission Regulation is an important component of the EU State Aid Framework as it defines the conditions under which Member States are authorised to grant public support without infringing EU competition law. It is especially relevant from a private equity perspective as it specifies when risk finance aid can be granted to national venture and growth funds or the companies they support.

Overall, Invest Europe broadly supported the proposed new Regulation as it will continue to foster the development of a venture capital ecosystem across the continent. Martin Bresson, Director of Public Affairs, said of the draft text: “We are pleased that the European Commission has taken into consideration our concerns regarding the maximum age a company can reach to remain eligible under the framework. The now double threshold – 7 years from first commercial sale or 10 years from registration – will introduce additional flexibility for scale-ups and companies active in tech-intensive sectors”.

Invest Europe however remains concerned that no changes have been made to the definition of undertakings in difficulty, which has shown during the Covid pandemic to be too narrow to take into consideration the specificities of long-term commitments made by buyout funds.

As it did for the recent review of the Risk Finance Guidelines, Invest Europe will mobilise its State Aid Task Force and will put at the disposal of the European Commission the expertise of its members on the changes made to the existing framework.

Invest Europe

© Invest Europe (formerly EVCA)