Ukraine: Brussels authorizes state aid for EU companies in difficulty

EU countries are allowed to grant subsidized loans and subsidies to firms suffering from the impact of sanctions and soaring gas prices, under certain conditions.

"We must mitigate the economic consequences of this war and support hard-hit businesses and sectors and act in a coordinated manner," Competition Commissioner Margrethe Vestager said in a statement.

The sanctions adopted by the EU have affected the Russian economy, but they "also weigh heavily on the European economy", she acknowledged, warning that this situation was likely to continue "in the coming months".

European states can use three types of devices to help their businesses, until December 31, 2022, detailed the Commission.

The duration of this relaxation may be extended if necessary.

Limited amounts of aid, "in any form whatsoever, including in the form of direct subsidies" are accessible, up to a limit of 35,000 euros per company in the sectors of agriculture, fishing and aquaculture, and 400,000 euros in all other sectors.

In addition, cash support in the form of subsidized loans or public loan guarantees is permitted, within certain limits linked to the needs of the company in difficulty, its turnover and the energy costs that it she has to endure.

Finally, Member States can "partially compensate", including through direct subsidies, companies which are large consumers of energy for the additional costs linked to exceptional increases in gas and electricity prices.

This aid will be limited to 30% of the costs taken into account up to a maximum of 2 million euros.

In the event of operating losses, requiring additional support to ensure the continuation of activity, the ceilings may be raised to 25 million euros and even to 50 million euros in certain specific sectors, "such as the production of 'aluminum and other metals, fiberglass, pulp, fertilizer or hydrogen and many basic chemicals'.

The conditions laid down for each of the aid schemes must make it possible to limit distortions of competition within the single market, the Commission stressed.

© 2022 AFP