Mandelson calls for more flexibility in state aid for tech sector

Mandelson: The UK could learn a lesson from France

Peter Mandelson yesterday called for more flexibility in EU state aid rules to allow the government to support struggling tech companies, according to the Financial Times.

The European Commission has a power of veto over member states' aid packages for struggling businesses to prevent the distortion of competition.

Speaking to business leaders, Mandelson said the UK could learn a lesson from France in the way it rescued high-tech firms, which were then successful in new markets.

"We want to see revised risk capital guidelines for public financing of high-tech and innovative companies," he said.

He cited French firm Alstom, which makes systems for the energy and transport sector as an example of successful state aid policies.

Mandelson indicated that state aid was only necessary in times of crisis, saying the EU should end in 2010 the temporary flexibility introduced into state aid rules after the financial crisis.

But he argued that an exception should be made for low carbon and hi-tech firms which could be made more flexible, even though there are already a number of exemptions under EU law for such companies and other start-ups.