Last week I reviewed the new State aid guidelines on risk finance. This week I will examine the provisions on financial instruments in the new structural and investment funds regulation. The regulation was published in the Official Journal just before Christmas. Both sets of rules have been updated on the basis of similar principles. The primary aim of both is to increase the flow of funds to SMEs and other innovative enterprises by incentivising private investors to assume more risk or to commit more of their own resources [this is the leveraging effect].
However, in this article I also identify a peculiar inconsistency between the two sets of rules. It concerns the possibility afforded to Managing Authorities to invest directly into enterprises. Since, as shown below, one of the requirements for mobilising structural and investment funds is compliance with State aid rules, I will suggest that the only way to effect direct investment is the removal of the State aid element from such investment.
An Assessment of the State Aid Consistency of Financial Instruments Supported by Structural and Investment Funds (Regulation 1303/2013) | Posted in Latest Updates on February 14, 2014 by Phedon Nicolaides
However, in this article I also identify a peculiar inconsistency between the two sets of rules. It concerns the possibility afforded to Managing Authorities to invest directly into enterprises. Since, as shown below, one of the requirements for mobilising structural and investment funds is compliance with State aid rules, I will suggest that the only way to effect direct investment is the removal of the State aid element from such investment.
An Assessment of the State Aid Consistency of Financial Instruments Supported by Structural and Investment Funds (Regulation 1303/2013) | Posted in Latest Updates on February 14, 2014 by Phedon Nicolaides
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