Margrethe Vestager, the European Commission’s Executive Vice-President responsible for Competition policy, told MEPs in the European Parliament’s Committee on Economic and Financial Affairs in a ‘structured dialogue’ on competition policy on Tuesday 31 January that she was consulting EU Member States on adjustments to the Temporary Crisis Framework on State Aid, in view of the current challenges linked to the energy crisis and the effects of the war in Ukraine on international trade.
She mentioned the possibility of investment aid “in strategic sectors that are at risk of relocation”.
In parallel to the Communication the Commission will present before the February European Council (see EUROPE 13110/1), “we will also consult Member States on a proposal to turn the Temporary Crisis Framework for State aid into a broader Crisis and Transition Framework”, Ms Vestager told MEPs.
The aim is to make the calculation of the amount of aid simpler and the approval faster. And to extend the scope to give Member States more flexibility “in the acceleration of renewable energy deployment and industrial decarbonisation”, added the Executive Vice-President.
She also announced a forthcoming consultation “on the possibility of investment support for green investments in strategic sectors that are at risk of relocation”. Such aid should be limited in time, proportionate, targeted at sectors where there is a real risk of relocation, and in line with cohesion objectives and the need to preserve a level playing field in the single market, Ms Vestager insisted.
“We are carefully listening to the feedback of Member States on the calibration of our proposal” and “we need to balance the need for short-term action with the risk of permanent damage to the single market”.
Under the Temporary Crisis Framework, Member States have already mobilised €672 billion. “This aid has been necessary and proportionate, but we must recognise that more than two-thirds of this amount has been notified by only two Member States”, said Vestager.
Not all Member States have the same spending capacity. Subsidy races will always be unfair, costly to the taxpayer, and risk undermining the integrity of the single market. “This is a red line. We are therefore seeking ways to further boost the EU’s REPowerEU plan and to set up a Sovereignty Fund to support Member States in a fair and equal way”, the Executive Vice-President said.
American IRA. Replying to a question by Luděk Niedermayer (EPP, Czech) on the effects of the US Inflation Reduction Act (IRA), Ms Vestager stressed that “the effects of subsidies under the IRA should not be overestimated”. She felt that a lot of investment was coming into Europe and that there were “few sectors” where there might be a temptation to pause investment in Europe and relocate to the US. Solar, batteries and raw materials are among these sectors.
This is why support for renewables in the EU must continue. “Our response will also have to be targeted at sectors at risk of relocation, and the system will have to be temporary”, Ms Vestager added.
Jonás Fernández (S&D, Spanish) asked about Spanish State aid to ArcelorMittal. A European official is said to have publicly announced that the Commission would approve the aid. This is aid to decarbonise production, replied Ms Vestager, who said the project had not yet been officially notified. Decisions are taken with the country concerned, and communication channels are highly calibrated, she insisted. (Original version in French by Lionel Changeur)