Commission Vice Vestager extends the exemptions she introduced because of the pandemic and explains how the competition watchdogs intend to support the green transition.
The EU Commission will show indulgence for a longer period of time when it comes to state aid for corona-damaged companies. Immediately after the start of the pandemic, in March 2020, Vice President Margrethe Vestager, responsible for competition, relaxed the strict rules on subsidies so that governments can support the economy quickly and comprehensively. This exception rule has been adapted and extended several times, but should now end at the turn of the year. But on Thursday Vestager announced in Brussels that this would be until June of next year to move. This “offers the opportunity to let the crisis measures run out progressively and in a coordinated manner,” said the Dane.
Vestager added that your authority has approved more than 670 corona aid worth a good 3.1 trillion euros to the governments. The liberal politician not only extended the exception rules, but also introduced two new funding opportunities. In the future, member states will be able to directly support investments by companies, for example in more energy-efficient systems or in digital technology. During the pandemic, many companies postponed such investments – the instrument is intended to make catching up easier. Second innovation: Governments should be able to grant mutual funds guarantees for their investments in small and medium-sized companies. This is intended to make it easier for medium-sized companies, whose financial reserves have been consumed by the pandemic, to get fresh capital.
Vestager also reported on the status of reforms to more than 20 regulations and guidelines on competition policy. “We are in the midst of a review of unprecedented scope and ambition,” said the Executive Vice President. She published one 20 page report about how these reforms should support the green transformation of the economy, digitization and resilience to crises. According to the document, the Commission wants to make it easier for Member States, among other things, to introduce purchase premiums for electric cars or to subsidize the construction of charging stations. Aid for the climate-friendly conversion of industrial production is also at the mercy of the competition watchdog. On the other hand, subsidies for fossil fuels, such as coal and oil, are unlikely to be in line with the new rules, according to the paper.
Vestager also wants to make it easier for governments to encourage the construction of chip factories. Europe depends on Asia for semiconductors, and because the tiny components are currently in short supply, automakers, for example, have to cut back on their production. The commission will present its own law to support the semiconductor industry in the coming year. In line with this, Vestager is now loosening the subsidy rules for this division – albeit with a few conditions: the planned plants must be at the forefront of technical development if they are to benefit. The investment must also bring benefits for the entire EU. Vestager emphasized that she wanted to prevent a subsidy race between the states.