The Postedia

Brussels to allow 27 to match aid outside EU to prevent companies from fleeing

Brussels is expanding the scope of the 27 to be competitive and attractive to industry. The European Commission has extended until December 31, 2025 the temporary crisis framework (to which it is now adding a transition mark) under which member states provide state aid to attract companies. Or that they don’t go to the US or China, who have opened a subsidy war. The Community government also makes the conditions for granting these subsidies or tax breaks more flexible and includes an innovation: 27 will be able to match the offers that companies receive from outside the EU.

The goal is to avoid headlines such as Volkswagen considering bringing its future battery plant to the United States to take advantage of the Inflationary Reduction Act (IRA). Thus, the European Commission allows member states to provide more support to companies “when there is a real risk that investments will move out of Europe.” “In these situations, Member States may provide support for the amount that the beneficiary could receive for an equivalent investment in an alternative location or the amount necessary to encourage the company to locate the investment in an alternative location within the European Economic Area, if it is cheaper. “, the statement said.

And what are the “exceptional cases” in which this flexibility will be allowed? To begin with, state aid flexibility is intended for key sectors of the ecological transition, such as batteries, solar panels, wind turbines, heat pumps and electrolyzers. In addition, the counter-offers have guarantees: investments carried out in assisted areas can benefit from them, that is, those with less development and therefore access to regional funds (66.29% of the Spanish territory) or those who are in the three. in member states and at least two supporting areas (one of them with a percentage of GDP below 75% of the European average). It also requires that the beneficiary company uses the most advanced production technology from an environmental point of view and does not encourage the relocation of investments within the EU.

“State aid rules, and in particular the Temporary Crisis Framework, have helped member states mitigate the impact of the ongoing crisis in Europe,” Competition Vice President Margrethe Vestager said in a statement about the flexibility that has been introduced. Temporary due to the pandemic and prolonged by the war in Ukraine, first due to competition from China and the US, then our rules allow Member States to accelerate “zero emissions” investments at this critical time, while maintaining a level playing field. Scope in the single market and common goals,” the statement said.

The easing of state aid has raised suspicions in the EU, given that the single market will be disrupted. Vestager himself warned that Germany and France will concentrate almost 80% of the subsidies issued within the framework of the temporary crisis. Of the €672 billion in national grant schemes approved by Brussels under emergency rules, “53% of the approved state aid is notified by Germany, while France represents around 24%,” the letter to ministers said.

The state aid relief is the first phase of a package the European Union is preparing for a commercial competition focused on the environmental transition from subsidies announced in the US, and announced the day before that European Commission President Ursula von der Leyen will meet Joe Biden in Washington. “The new Zero Emissions Industry Act sets clear targets for European clean technologies by 2030. The goal will be to focus investments on strategic projects that cover the entire supply chain,” German said of the second phase of the proposal.

The third element is the reform of the electricity sector. According to the draft prepared by Context, Brussels intends to limit price intervention to cases of energy crisis. It also intends to promote long-term contracts. The fourth point is to increase the extraction, processing and processing of strategic raw materials in the EU to gain autonomy. The goal is to “more than halve” the time it takes to obtain a mining permit, which now takes up to five years, as well as reduce red tape by creating a single window, the memo explained. Market Commissioner Inside, Thierry Breton.

“Europe must make the most of its limited but not insignificant resources.” Europe represents less than 3% of the global exploration budget and half comes from three member states: Finland, Sweden and Spain. If we want to cover part of our needs with domestic capacity, we have to change this trend,” he added. In Brussels, however, they know that there will be no self-sufficiency on the continent, but they seek to cooperate with what von der Leyen has baptized as the critical raw materials club, in which he has invited countries such as the US or Ukraine.

Source: El Diario





related posts

Post List

Hot News