State aid: Commission invites interested parties to provide comments on proposed revision of Guidelines on State aid to promote risk finance investments

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This article is brought to you in association with the European Commission.

The European Commission has launched today a targeted public consultation inviting all interested parties to comment on a proposed targeted revision of the Guidelines on State aid to promote risk finance investments (the “Risk Finance Guidelines”). Interested parties can respond to the consultation for eight weeks, until 16 July 2021.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Access to finance is essential for Europe’s small and medium-sized enterprises to make the most of their growth potential and lead the green and digital transitions. That’s why we are further simplifying our existing State aid rules. We want to make it easier for Member States to give access to finance when the market doesn’t deliver. Of course ensuring that possible competition distortions are kept to a minimum. We now invite all interested parties to share their views.”

The Risk Finance Guidelines aim at facilitating access to finance by European small and medium-sized enterprises (“SMEs”) and companies with a medium capitalization (the so-called “mid-caps”). They are in particular targeted at innovative and growth-oriented SMEs and certain types of mid-caps in the early stages of their development, which may face difficulties in gaining access to finance, despite their business potential. To tackle such market failures, the Risk Finance Guidelines enable Member States, subject to certain conditions, to address this funding gap by attracting, through the provision of State aid, additional investments into the eligible SMEs and mid-caps through well-designed financial instruments and fiscal measures.

The Commission has conducted an evaluation of the current Risk Finance Guidelines as part of the State aid Fitness Check. The evaluation revealed that the current provisions of the Risk Finance Guidelines work well and they are overall fit for purpose.

At the same time, the evaluation also showed that some targeted adjustments, including clarifications of some concepts and further streamlining, may be needed to further simplify the existing rules and clarify their application. In this context, the Commission is proposing a number of targeted changes to the current rules:

  • Further clarifying certain concepts, in particular with respect to the evidence needed to demonstrate the existence of a specific market failure or other relevant obstacles in accessing finance, in line with the existing case practice. In this respect, the Fitness Check showed that Member States have difficulties in quantifying the funding gap. The draft Guidelines therefore propose to limit the need to provide a funding gap analysis for the largest risk finance aid measures, in particular those that allow amounts above €15 million per individual beneficiary.
  • Focusing the provisions in the draft Guidelines on the compatibility of risk finance aid to avoid unnecessary overlaps with the Commission Notice on the Notion of aid. The Notice, adopted in 2016, provides guidance on whether or not public interventions can be deemed to constitute State aid. For this reason, it appears to be no longer necessary to keep a similar guidance in the revised Risk Finance Guidelines. Furthermore, the Commission continues to be available to provide targeted advice to Member States and stakeholders.
  • Streamlining existing provisions and aligning certain definitions included in the draft Guidelines with those included in the General Block Exemption Regulation (“GBER”) to ensure consistency, without changing the substance of the rules. Notably, the definition of ‘innovative mid-caps’ under the draft Guidelines is aligned with the definition of ‘innovative enterprises’ under the GBER to remove the current inconsistencies on what companies are considered ‘innovative’ under the two sets of rules.
  • Streamlining the structure of the Guidelines. This consists, in particular, in the consolidation under one single section the requirements for the ex ante assessment that the notifying Member State needs to submit to the Commission in order to demonstrate why the aid measure is necessary, appropriate and proportionate (these requirements are currently included in different sections). This aims at increasing readability of the draft Guidelines, thus easing their application and providing more clarity to the Member States.

The draft Risk Finance Guidelines and all the details about the targeted public consultation, including more detail about the proposed changes, are available online.

Next steps

In addition to the targeted consultation launched today, the draft Risk Finance Guidelines will also be discussed in a meeting between the Commission and Member States that will take place in the second half of the consultation period. This process will ensure that both Member States and other interested parties will have sufficient opportunities to comment on the draft Commission proposal.

The adoption of the new Risk Finance Guidelines is foreseen for the last quarter of 2021.


The Risk Finance Guidelines set out the conditions under which State aid granted by Member States to promote risk finance investments may be considered compatible with the Single Market.

The Guidelines apply to all risk finance aid measures that do not fall within the scope of the GBER, which in turn, enable Member States to directly implement risk finance State aid measures directly without prior notification to the Commission, subject to certain conditions (e.g. only for SMEs and for amounts up to €15 million per beneficiary).

The GBER provisions on risk finance aid are also being revised to ensure they remain consistent with the Risk Finance Guidelines. A targeted public consultation on the proposed changes to these GBER provisions will take place in the coming months.

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