2023-08-02 18:47:11
Since Russia’s aggression in Ukraine, the Commission has approved €740.9 billion in state aid, much of it for Germany.
In March 2022, the day after Russia attacked Ukraine, and while Europeans had already been suffering from energy price hikes for months, the Union adopted solid exemptions to the prohibition of state aid.
A year later, to respond to the policy of American subsidies for decarbonization, this “Temporary crisis framework” was remodeled into a “Temporary crisis and transition framework”, further opening the door to aid for businesses. In total, after a year and four months under this regime, the European Commission has approved 275 aid measures notified by the Member States, for 740.9 billion euros, one of its spokespersons told L’Echo, Arianna Podesta.
The Union’s leading economy is also by far the first to use the exceptional regime: to date, 48.5% of approved aid had been notified by Germany. The measures notified by France represent 22.6% of the total amount of aid approved, those of Italy, 7.7%. Next come Denmark (3.3%), Finland (2.5%) and Hungary (2.4%), further indicates the spokesperson. As for Belgium, which last June saw the Commission approve aid of 280 million euros to support efforts to decarbonise ArcelorMittal’s steel production, it represents only 0.5% of aid from State validated.
Aids to deploy
The amounts actually allocated by the governments are still very far from those approved by the Commission. For the year 2022 (from March, therefore), 93.5 billion euros had actually been allocated to companies – i.e. 14% of the authorized amounts. Unsurprisingly, Germany was by far the first to pay. It alone released 76% of all aid allocated by Member States over this periodaccording to preliminary data, a lion’s share almost entirely destined to the rescue of two energy giants, Uniper and SEFE, caught between the hammer of the reduction of Russian gas supplies and the anvil of their long-term commitments.
“These figures may reflect the significant disparities that exist within the EU in terms of fiscal capacity”
“These figures may reflect the significant disparities that exist within the EU in terms of the budgetary capacity of Member States to allocate aid to companies”, notes the spokesperson, who adds that the Commission hopes to help correct this imbalance by strengthening the deployment of European financial support for investments in critical technologies, through a new instrument (Step).
In the meantime, State aid authorization decisions continue to rain down. Again on Wednesday, the Commission approved a €308 million Irish support program for forestry companies investing in afforestation. At the end of July, it had authorized two aid packages from Germany and France to support their steelmakers in their efforts to reduce greenhouse gas emissions: 2 billion for Thyssenkrupp Steel Europe, and 850 million for, again , ArcelorMittal.
As a general rule, state aid is prohibited by the European Treaty (TFEU) in the name of undistorted competition, but the European Commission can make exceptions when justified on grounds of economic development. The provisional framework that applies today provides safeguards: the aid must not trigger intra-European relocations, and the possibilities of support are greater for companies located in disadvantaged regions.
The summary
- In just over a year, the Commission has approved €740.9 billion in state aid.
- Germany is by far the first country to make use of the temporary regime that allows EU states to help their businesses.
- Belgium only represents 0.5% of State aid validated by the Commission.
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