Economic policy: Against the consequences of war: EU Commission simplifies state aid

Economic policy: Against the consequences of war: EU Commission simplifies state aid

The Ukraine war is also having a negative impact on the EU economy. Therefore, companies should now receive state support more easily. The EU Commission decided on these new rules.

In the future, companies should be able to receive state support more easily in order to protect them from the economic effects of the war against Ukraine.

Affected companies should be able to receive up to 400,000 euros from the state in the future, as the EU Commission announced. A limit of 35,000 euros applies to agricultural and fishing companies. “This support can take any form, including direct grants,” the statement said.

If the state wants to support a company with money or tax benefits, for example, very strict rules apply in the EU. This is intended to prevent competition from being distorted and, for example, an EU country helping a company to ensure that a competitor from another country is forced out of the market.

Sanctions weigh on EU economy

In addition to direct consequences of the war, such as a lack of harvest workers, there are also other effects for companies: Because of the Russian war of aggression, the EU had imposed severe sanctions on Moscow. “They are also a burden on the EU economy and will continue to do so in the coming months,” said EU Competition Commissioner Margrethe Vestager. For example, there are sanctions against Russian banks. In certain cases, companies are also prohibited from doing business with companies from Russia.

The German Economics Minister Robert Habeck (Greens) welcomed the new guidelines. “I thank the European Commission for being able to work out solutions so quickly together with the Member States,” he said.

Another large block of the project to dampen the effects of war concerns liquidity support for companies. This is to be granted in the form of guarantees or loans with favorable interest rates. Upper limits should be calculated based on the needs of the companies, their turnover or based on the energy costs of the company.

New rules apply until the end of the year

In addition, companies should be able to be compensated for additional costs due to high electricity and gas prices. Limits are also provided for this, for example, a maximum of two million euros may be paid per recipient. If a company makes losses, aid of up to 50 million euros should even be possible for certain companies.

If EU states make use of the new crisis framework for subsidies that has now been adopted, they should be able to demand more environmental protection from companies. However, there is no obligation to do so. The new rules will initially apply until the end of the year, but can be extended.

Source: Stern

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