‘Great turning’ in European policy: Commission relaxes rules regarding state aid to retain industry

In an attempt to green industry and keep companies within the European borders, the European Union will allow Member States to give state aid to companies that use a lot of energy. From now on, Member States may subsidize up to 25 percent of the energy costs of a company. That is what the European Commission has Wednesday announced.

The European trade press speaks of a “great turning“In thinking about economics in Brussels. State aid has been a taboo within the European Union for many years. Such subsidies would be so -called Level Playing Field disrupt the joint market. This single market is one of the most important pillars among the European Union.

But that taboo must be broken, says Teresa Ribera, EU participation commissioner, who initiated the plans. “If Europe wants to play a leading role in clean technology, we must act courageously and clearly,” said Ribera to Euractiv. The state aid supply is part of a larger package of measures (Scenery) that European industry must green.

Industrial policy

Since Mario Draghi last year in an authoritative report concluded that the competitiveness of the European economy is in danger, industrial policy is high on the agenda of European policy makers. The former president of the European Central Bank warned that “huge investments” are needed if Europe does not want to be lagging behind the United States and China when it comes to defense and sustainability. In the context of that competition, France and Germany, among others, have been arguing for more possibilities for state aid for some time.

There is also criticism of the state aid plans, in particular of smaller Member States. Handelsministers of Denmark, Ireland and Poland, among others, left them in one declaration know how to fear the “integrity of the joint market”. These countries fear that Member States with more tax resources can now easily give their companies an advantage position.

According to Ribera, enough guarantees have been built into the new package of measures to prevent this. The support must be ‘necessary and proportional’. Moreover, it is only permitted as long as the total energy costs of a company remain above 50 euros per megawatt hours.

To share





Mail the editors