The European Commission will propose new rules on state aid tomorrow in a bid to slash red tape and encourage its members to shift support from ailing industries to innovative small firms.
The new rules will be simpler and remove some of the legal uncertainty so countries can more readily support innovation at small- and medium-sized companies, commission sources said yesterday.
Without confirming the details from the sources, commission spokesman Jonathan Todd told a news conference the 25 commissioners are set to propose the new rules - which will be open to comment for months - "with a view to helping the union's competitiveness without unduly distorting competition".
The new rules come after Competition Commissioner Neelie Kroes won general approval for a state aid plan in June with the goal of cutting massive state aid that often curtails competition, while encouraging aid to jump start new businesses.
The proposals will support the creation of innovative start-ups in the form of tax exemptions and subsidies of up to €1 million over three years. The idea is to limit the bureaucratic burden on the start-ups, the sources said.
The rules would also provide new flexibility for risk capital, especially in the early stages of a project when it is difficult to find private investors.
The commission also hopes to expand state aid rules to encourage research and development and to encourage small- and medium-sized enterprises (SMEs) trying to design new models or make commercially usable prototypes.
In addition, SMEs will be able to get aid to purchase services from so-called "innovation intermediaries", which provide strategic advice, training, office space and data banks. SMEs would also get up to €200,000 to purchase such services.
In addition, SMEs would be able to get state aid to recruit qualified researchers and engineers and to exchange personnel with universities and large companies.
The document is expected to call for comments until November 21st, after which the commission will modify or retain its original proposal.
