European Commission Executive Vice-President Margrethe Vestager assured MEPs in the European Parliament’s Committee on Industry and Research (ITRE), on Thursday morning 31 March, that the provisions of the European Chips Act do not contravene the EU Treaties and even promote healthy competition between economic operators.
Asked by several MEPs, including Christian Ehler (EPP, Germany) and Jessica Stegrud (ECR, Sweden), about the implementation of the European Chips Act (see EUROPE 12886/1) and in particular a more strategic State aid policy to enable ‘first of a kind production facilities’ and the potential distortion of competition, Ms Vestager was reassuring.
For her, the key is to always seek the right balance to avoid unjustified distortions in the European Internal Market. According to Ms Vestager, the credibility of the European Union on the international scene is also at stake.
“In order to make sure that the foreign subsidies proposal is legitimate, obviously we have to be very careful with what we do and subsidies paid by Member States within the Union”, she explained. State aid must respond exclusively to market failures in strict compliance with the European treaties, namely Article 107§3 c) of the Treaty on the Functioning of the EU, she emphasised.
According to this article of the Treaty, aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest, may be considered compatible with the Internal Market. Thus, aid must be appropriate, proportionate and serve pan-European interests.
For the Executive Vice-President, this approach is the right one, as it makes it possible to “disable” a subsidies race between Member States. Ms Vestager reported the behaviour of some private actors who ask a Member State how much it would be prepared to give in subsidies for a project and then, once they have an offer, go to another Member State and give them the offer of the first one in the hope of raising the stakes.
Thanks to the approach adopted by the European Commission, there is an assessment of State aid at European level for the same project, which forces more proportionate actions with always a pan-European effect.
Responding to the question of the workload that the European Commission would suffer due to the inflation of State aid notifications in relation to important projects of common European interest (IPCEI), Ms Vestager acknowledged that the work is only bearable if Member States do their part.
For her, IPCEIs remain the right tools if they allow the emergence of several large economic players who are able to compete with each other and to face international competition, she stressed.
In any case, one thing is certain, she underlined: the Commission’s objective is not to achieve self-sufficiency. Such a target would represent an investment not of €43 billion - as is currently on the table - but of €300 billion, according to figures she put forward. (Original version in French by Pascal Hansens)