The anti-crisis flexibility measures

EU: State aid of up to 70% for transport, agriculture and fisheries

The Commission presents the new framework to respond to an energy shock that President Von der Leyen quantifies at 500 million per day. The risk, with continuous ad hoc interventions, is to create distortions in the single market, offering more room for manoeuvre to countries with accounts in order

from our correspondent Beda Romano

La vicepresidente esecutiva della Commissione europe, Teresa Ribera, interviene durante una conferenza stampa per annunciare il quadro temporaneo sugli aiuti di Stato per la crisi in Medio Oriente  REUTERS

3' min read

Translated by AI
Versione italiana

3' min read

Translated by AI
Versione italiana

BRUSSELS - After the pandemic and the Russian invasion of Ukraine, the energy shock caused by the US and Israeli war against Iran is forcing the European Commission to launch new flexibility measures in the use of state aid. The sectors hardest hit by the economic crisis will be able to enjoy subsidies for the purchase of fuel and fertilisers. The new framework raises the question whether continued ad hoc interventions are not undermining the integrity of the single market.

Competition Commissioner Teresa Ribera explained yesterday: "Energy transition remains the most effective strategy to ensure Europe's independence, growth and strength. However, the recent spikes in energy prices call for an immediate response. The proposed measures offer easy-to-implement solutions that will support the development of the EU's key sectors, such as agriculture, fisheries and transport, while mitigating the effects of the crisis".

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State aid to these sectors will be able to take various forms, the European Commission specified. For the agriculture, fisheries, land transport and short sea shipping sectors within the EU, Member States will be able to compensate up to 70% of the additional costs incurred by beneficiaries due to the increase in fuel and fertiliser prices caused by the crisis.

For these sectors, a simplified option will allow Member States to determine the amount of individual aid on the basis of elements such as the size and type of activities of beneficiaries, a general estimate of fuel consumption in the sector or other relevant indicators, rather than requiring beneficiaries to provide detailed evidence of their actual

consumption. Under this option, each beneficiary may receive up to EUR 50,000.

Finally, energy-intensive businesses that are already eligible for aid under another state aid scheme (known by the acronym CISAF) will be able to receive a refund of up to 70 per cent of their electricity bills. The measures presented yesterday come after Brussels last week outlined a series of proposals to reduce demand and calm prices in response to the jump in oil prices.

The new state aid framework is intended to be targeted and temporary (in force until 31 December 2026). The aim is to avoid overly generous subsidies as far as possible - as happened in 2022, when energy prices rose sharply after Russia cut off gas supplies following its invasion of Ukraine. At that time, the decision to relax state aid rules contributed to a large indebtedness of many member countries.

As mentioned, since the beginning of the decade, State aid rules have been temporarily changed on several occasions. One wonders whether opting for such ad hoc choices is wise. Besides creating the conditions for distortions in the single market by offering more room for manoeuvre to countries with accounts in order, the measures are in contradiction with an increasingly European economic policy. Some countries want to raise this issue in the negotiation of the next budget 2028-2034.

In this regard, Commission President Ursula von der Leyen reiterated yesterday in Strasbourg that new own resources must be found to meet both traditional expenditure and new priorities. The crisis in the Middle East has caused fossil fuel imports to rise by EUR 27 billion in 60 days. That is 500 million more per day.

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