Businesses blame Brussels rules for blocking emergency funding

Desperate companies are being blocked from accessing emergency support by Brussels state aid rules, according to business groups demanding more help from the Government.

Business leaders, lawyers and turnaround experts have warned that European Union restrictions designed to stop countries bailing out failing firms are blocking rescues and putting thousands of jobs at risk.

Access to the Government’s loan guarantee and startup schemes have been severely hindered by state aid regulations created in Brussels, with experts saying UK firms have disproportionately impacted.

The EU’s so-called undertaking in difficulty test has hammered fast-growing firms desperate for a lifeline, warned Allie Renison, head of EU and trade policy at the Institute of Directors, and Alexander Rose, a leading state aid lawyer, writing for the Telegraph’s website.  

They said the test, which deems whether a firm is in financial trouble, has had a severe impact in the UK.

The rules stop businesses from seeking help if they have invested heavily in growth or are going through a turnaround plan.

Ms Renison said the problem has become “the most common thing coming through in our inbox” and urged the UK to lobby for change.

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