EU commissioner Margrethe Vestager has agreed to temporarily relax state aid rules that the tech industry argued were holding up several countries’ support for start-ups, reported the Financial Times.
Many venture-backed technology companies are classified as being in “financial difficulty” under EU rules because they are run at a loss to accelerate growth or have sold a large portion of the company to investors.
As a result, under state aid rules designed to prevent countries from propping up failing national companies, many European start-ups are unable to benefit from the kind of state support that has been made widely available to more traditional businesses in recent months.
The EU is now moving to extend the “temporary framework” introduced in March to relax state aid rules for struggling companies, so that it includes innovative start-ups and other “micro and small companies”.
Ms Vestager, the EU’s executive vice-president who leads competition policy, said such businesses were “crucial for the economic recovery of the Union”. Private investors would also be able to invest alongside government funds under the new proposals, she added.
Full Content: Financial Times
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