The European Commission submitted to Member States on Thursday 10 March a draft proposal for a Temporary Framework for State Aid to support the EU economy in the context of the Russian invasion of Ukraine.
The draft proposal is based on Article 107(3)(b) of the Treaty on the Functioning of the EU, which allows aid to be granted to remedy a serious disturbance in the EU economy.
Executive Vice-President Margrethe Vestager, in charge of competition policy, recalled that “Putin’s war on Ukraine will also effect the EU economy now and in the months to come”.
The Commission says it is ready to use “the full flexibility of our State aid toolbox to enable Member States to support companies and sectors severely impacted. Together with Member States, we are exploring options to provide the necessary and proportionate support. And at the same time protecting the level playing field in the European single market”, explains Ms Vestager.
The draft proposal for a temporary framework, sent for consultation to the Member States, is confidential. The Commission will quickly assess the responses that will be sent by Member States in order to finalise its position on a new temporary framework.
The Commission is thus assessing the measures deemed necessary to address the current crisis. These could complement the existing possibility for Member States, under Article 107(2)(b) of the Treaty, to mitigate damage directly caused by Russian military aggression against Ukraine, including certain direct effects of economic sanctions or other restrictive measures.
In particular, the draft proposal under consultation could allow Member States to grant:
- temporary liquidity support to all companies affected by the current crisis. This support could take the form of guarantees and subsidised loans;
- aid for additional costs due to exceptionally high gas and electricity prices. This aid could be granted in any form, including limited grants, to partially compensate companies, in particular energy intensive users, for energy price increases.
Both types of measures would also be available to companies considered to be in difficulty, as they may face acute liquidity needs due to current circumstances. Entities sanctioned and controlled by Russia would be excluded from the scope of these measures.
The Commission also poses a number of questions to Member States, for example on aid intensities and ceilings, the definition of energy-intensive users, whether aid to such users should be subject to ‘green’ conditionality, whether other input costs subject to similar price increases to those of gas and electricity should be taken into account, and the need for further measures for certain sectors such as agriculture. (Original version in French by Lionel Changeur)