EU State Aid Rules Hinder Tech Bailouts, Say Industry Groups

Tech start-ups across Europe are struggling to access coronavirus support schemes because of EU state aid rules, industry groups from several countries say, threatening to undermine Brussels’ attempts to stimulate local rivals to Silicon Valley, the Financial Times reported. More than a dozen tech trade groups, including industry associations in France, Germany, the UK and Ireland, have together written to EU commissioner Margrethe Vestager calling for “more flexibility” in member states’ ability to provide “vital” support to lossmaking but innovative small businesses. National governments in several countries have offered schemes to support R&D or encourage venture capital investment. However, several of these programmes have hit roadblocks in Brussels owing to the EU’s determination that they fall foul of the “undertakings in difficulty” test — a part of European competition law designed to prevent member states from propping up failing businesses with state aid. Read more