ANNOUNCEMENT 25 Aug 2016
On 12 December 2016, the European Commission decided not to raise objections against the prolongation of the "INVEST" measure by the German government. The measure, with a total budget of 184 million EUR, provides direct grants for risk capital investments for the years 2017-2020.
NUMBER OF INTERVENTIONS
European Commission case summary (SA.46308)
European Commission letter to Germany, 23.01.2017
According to Germany, "The measure aims at increasing the provision of private risk capital for small, young, innovative companies in Germany. To that end, Germany intends to strengthen the activity of business angels who are considered to have an important role in providing private capital to these target companies. [...] The measure will be in effect for applications introduced until 31 December 2020. [...] The overall budget of the measure is EUR 184 million (EUR 46 million per year). [...] Under the notified measure, direct grants will be provided to natural persons who acquire in their own name, on their own behalf and at their own expense, ordinary, fully risk-bearing equity shares, newly issued by investee companies through capital increase, and pursue a realistic exit strategy." (para. 4, 8,10 and 13 letter from the EC to Germany, Brussels 23.01.2017). The measure is a prolongation and amendment of the previous INVEST scheme, in effect until 31 December 2016.
Based on the findings of the European Commission, "[...] investors benefitting from support under the scheme are competing with other investors (natural persons, registered undertakings) on the market for company shares, and it cannot be excluded that the aid distorts or threatens to distort competition on that market." (para. 22 letter from the EC to Germany, Brussels 23.01.2017)
In the GTA database the determination of whether a policy instrument discriminates against foreign commercial interests turns on whether it creates or alters the relative treatment of domestic firms versus foreign commercial interests. On this metric, the state aid proposed here is discriminatory because the state aid is not available to competing firms outside of the implementing jurisdiction.