The EU governments should be allowed to support companies more generously and for a longer period of time, which are struggling with the high energy prices and other consequences of the Ukraine war. The EU Commission relaxed already in March the strict state aid rules. The Brussels authorities are now planning to make these exceptional rules even more flexible and to apply them for a year longer, until the end of 2023. This emerges from a 39-page draft of the changes that the Commission is currently discussing with the member states and which of the Süddeutsche Zeitung present. The responsible Commission Vice-President Margrethe Vestager wants to adopt this new version of the so-called Temporary Crisis Framework for state aid in October.
The authority would then also consult the adjusted set of rules in order to approve subsidy programs for companies from the planned German defense shield. Berlin is providing up to 200 billion euros to relieve citizens and companies of energy costs by 2024. This “double boom,” as Chancellor Olaf Scholz calls the package, has provoked some excitement in other EU governments and in the Commission. Some member states fear that the lavish support could give German companies unfair advantages in the common internal market. The federal government denies this: If you take into account the size of the population and economy, the aid is no more generous than that of other countries, argue representatives of Berlin.
Internal Market Commissioner Thierry Breton announced anywaythat the authority will examine closely whether the package distorts the internal market. That is the task of the Commission’s competition watchdogs, which are subordinate to Vestager, and they will soon be working on the basis of the changed exception rules.
The aid should not “get out of hand”
One of the most important adjustments is that, according to the draft, the upper limit for permissible aid will be increased by half. Governments can then reimburse up to 70 percent of the costs for industrial companies that consume a lot of energy, but no more than 50 million euros per year. In addition to grants, governments can provide cheap loans or guarantees. The new subsidy framework introduces a further purpose for which governments may issue such loan guarantees: This should enable corporations to deposit high levels of security for transactions on energy exchanges in the future. The sharply increased and fluctuating prices mean that buyers have to present more collateral. This has already put some energy traders and suppliers in financial difficulties.
The plans have already met with approval in the European Parliament: CSU MP Markus Ferber describes the expansion of the crisis framework as “the right signal, because the sanctions and in particular the high energy prices are having a full impact on companies and eroding their economic substance”. In this situation, adapted EU rules for subsidies should prevent the government’s aid programs from “getting out of control,” says the economic policy spokesman for the Christian Democratic EPP group.