The European Union facilitates subsidies for European companies – Economy

Anyone producing clean technologies in Europe, such as wind turbines or electric car batteries, can look forward to large-scale government assistance. In a subsidy race with the United States and China, the European Union Commission eased subsidy rules on Thursday, according to which European governments can subsidize important industrial sectors for the green transition with state money. This is intended to prevent companies from relocating and settling new ones as governments lure them in with more generous subsidies.

To do this, the commission changes for the third time “Temporary Crisis Framework” they are in March A year ago in response to the looming energy crisis. Firstly in summer And later end of october In 2022, the Brussels Authority amended these rules to give member states more freedom to support their economies. This was especially important for companies that faced problems due to high energy prices.

Now the crisis framework has become more than just a geostrategic tool. In the future, member states are likely to spend large sums if companies would otherwise invest outside the EU. EU countries may now provide the same amount that a non-EU company would receive as state aid, subject to the terms. In other words: a European company plans because of US subsidies under Inflation Reduction Act If the Biden government decides to open a new factory in the United States, state funds can be used to persuade it to invest within the European Union.

However, there are gradations. Only the amount strictly necessary to convince the company to invest within the EU is allowed. Another requirement is that the group is located in a development zone defined by the European Union, that is, generally in structurally weak areas. Otherwise, you must invest in at least three member states, again with stringent additional requirements.

The Commission also requires the use of low-emission technologies and makes it a condition that aid does not lead to a shift in investment among member states. This should prevent big, rich countries like Germany from subsidizing their companies more lavishly than cash-strapped countries like Italy. Commission Vice President Margrethe Vestager, who is responsible for the crisis framework, warned in January that Europe’s competitiveness as a trading location should not be “built on subsidies” in the long run. Exceptions are now limited to the end of 2025.