The European Commission decided this Friday to extend, until December 2023, the temporary relief framework in the state aid rules for the member states of the European Union (EU) to support the economies due to the energy crisis, also increasing flexibility.
In a statement, the community executive announces that it has adopted, after consulting the EU countries, “a modification of the temporary crisis framework to allow Member States to continue using the flexibility provided for in the rules on state aid to support the economy in the context of Russia’s war against Ukraine”, which accentuated the energy crisis in the community bloc.
These more flexible rules are now expected to be in force until December 31, 2023, and this extension “does not prejudice the possibility of authorizing other necessary and proportionate measures,” guarantees Brussels.
In addition to the extension, the temporary crisis framework related to state aid is also modified with today’s decision, which authorizes countries to support companies active in the agricultural sectors for 250 thousand euros, fishing and aquaculture for 300 thousand euros and the rest up to two million euros.
At the same time, additional flexibility is provided for Member States to continue liquidity support for energy utilities and help for companies affected by rising energy costs, subject to safeguards.
New measures are added to support the reduction of electricity demand, given the approved objective of reducing consumption by country (of 10% in general and 5% in peak hours).
In a statement also released this Friday, the executive vice president of the European Commission and head of the competition portfolio, Margrethe Vestager, highlights that this decision “gives Member States greater flexibility to create support schemes adapted to the needs of their economy”, while continuing to foster the ‘green’ transition, while maintaining safeguards to ensure aid remains targeted and proportionate”.
“In general, we have extended the application of the framework until the end of 2023, with a view to the continuation of the crisis, giving Member States more predictability and time to implement support schemes and providing a stable legal framework for companies,” he says. Margrethe. Vestager. .
Thus, in addition to increasing the ceilings on the amount of aid and allowing liquidity support, the community executive defends aid to compensate for high energy prices, as well as ‘green’ investments.
In March 2020, due to the economic effects of the pandemic, the European Commission adopted a temporary framework to facilitate state aid, an initiative that expanded the support that Member States can give their economies, normally prohibited by competition rules. of the EU, such as loans with state guarantees, subsidies, among others.
This temporary framework has meanwhile given rise to another, adopted in March 2022, in the context of the war in Ukraine caused by the Russian invasion last February.
Geopolitical tensions over the war in Ukraine have affected the European energy market, especially as the EU relies on Russian fossil fuels, such as gas, and fears supply cuts this fall and winter.
Source: TSF
