The EU27 Internal Market and Industry Ministers once again discussed how best to strengthen European competitiveness on Thursday 2 March. The relaxation of State aid rules as a business support measure featured prominently in the discussions (see EUROPE 13116/5).
According to European Commission Vice-President Margrethe Vestager, a strong message from the ministers is “that you do not get competitive based on public subsidies”.
In detail, however, there is less consensus on this issue, and the Swedish Minister for Industry, Ebba Busch, who chaired the meeting, recalled that: “Some colleagues supported the proposed simplification and customisation of State aid rules, while others warned that such changes could undermine fair competition in the Internal Market”.
The temporary and targeted nature of the potential future framework for State aid is, in any case, the condition for all. It is also important to ensure that an impact assessment and analysis is carried out before changing the rules on State aid, Ms Busch insisted.
The European Commission last week closed its consultation with Member States on the proposals it put forward in early February to transform the Temporary Crisis Framework into a Temporary Crisis and Transitional Framework on State Aid (see EUROPE 13112/3). Without giving a precise date, she said that the Commission would soon publish the results of this consultation.
Asked by EUROPE, Margrethe Vestager already indicated that there had been a bit of back and forth on the notion of what is “temporary”. “Some say that it’s too long, some that it’s too short; what is important for us it that the time to decide to provide a subsidy is short”.
On their arrival at the EU Council on Thursday, several ministers warned against relaxing the rules on State aid. German Minister Sven Giegold defended his country’s position, which supports the temporary crisis and transition framework. He said he was “surprised that the countries that argue aggressively about State aid are also the most aggressive when it comes to tax competition. Greater tax coordination is also part of the future of the common market”.
Ten Member States call for equal opportunities for all
In parallel to these discussions at ministerial level, the heads of government of ten Member States sent a letter to the President of the European Council, Charles Michel, and the President of the Commission, Ursula von der Leyen, warning against short-term thinking to boost the EU’s competitiveness.
“Crisis management and reactive measures do not create a robust economy that stands the test of time and guarantees European prosperity. There is even a risk that the combined effect of short-term measures will undermine fair competition and potentially weaken the fundamentals of our economy”, the signatories write.
They call for a “strategic overhaul of the Single Market” based on its greatest strengths: a reduction in the regulatory burden, the removal of barriers to private capital flows, the facilitation of investment and a focus on research and development.
The countries that signed the letter are Belgium, Estonia, Denmark, Finland, Ireland, Latvia, Lithuania, the Netherlands, the Czech Republic and Slovakia.
These objectives of strengthening the Internal Market and, above all, the need to simplify the rules were also agreed among the Industry ministers. “Regulation is very important, but today we really need to make an effort on rules and administrative practices that are too heavy, especially for SMEs”, said the European Commissioner for Internal Market, Thierry Breton.
Member States will again address these competitiveness issues at the European Council on 23-24 March in Brussels, this time with the Commission’s forthcoming proposal for a ‘net zero’ industry regulation on the table. (Original version in French by Léa Marchal)