European Commission abolishes flexible state aid rules at the end of June

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European Union member states must once again follow normal state aid rules from July, the European Commission reported on Thursday. At the start of the corona crisis, these rules were relaxed somewhat to help as many companies as possible get through the pandemic, but this is no longer the case, according to EU Commissioner Margrethe Vestager (Competition).

In normal times, strict rules apply to state aid to businesses to prevent unfair competition, but these were briefly published during the crisis. On March 19, 2020, just after the start of the lockdown in most EU countries, the European Commission decided to turn a blind eye to this support.

The scheme was originally due to expire at the end of that year, but it was extended three times. In October 2020, it was decided that the rules would apply until June 30, 2021. They were later extended again until the end of that year, and then again until the middle of that year.

“During this period, we have approved 950 national schemes for a total amount of more than 3 trillion euros,” Vestager said. “Our data shows that 730 billion euros of this amount has indeed been spent. But after more than two years, the health crisis in Europe is finally almost under control and member states have lifted the restrictions.”

This is why the Commission no longer considers it necessary to provide additional support to businesses after 30 June. An investment regime will remain in place until the end of this year and companies can still count on a regime to increase their cushion until the end of 2023. “These are two important measures to revive the economy”, Vestager said.

Vestager stresses that no business will be cut overnight. The phase-out will be phased and likely to be fully completed by June 30, 2023. In addition, member states can use a crisis package to guide businesses through the Ukraine crisis.

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