Member States now know a little more. The European Commissioner for Competition, Margrethe Vestager, presented during an Ecofin – a meeting of the 19 finance ministers of the euro zone -, which was held Tuesday morning in Brussels, her proposals for the authorization of aid of state in the future, because of the conflict in Ukraine.
After being stopped for two years with the pandemic, the classic state aid regime will once again deviate from normal due to soaring energy prices.
Jump in production costs
Indeed, the price of a barrel of oil rose from 79 dollars at the start of the year to 107 dollars on Tuesday, an increase of 35% in two and a half months. The increase is even stronger in euros since the European currency has depreciated against the greenback with the war declared by Russia at the gates of the Old Continent. The price of gas, quoted in Rotterdam, has increased less, around 10% only. But it temporarily tripled in early March. The production costs of electricity-intensive companies are therefore rising, as electricity is often produced with gas.
The price of other raw materials is also rising sharply, such as those of agricultural products and metals. Russia and Ukraine being two major producers, shortages could also affect European companies. Not to mention that some companies do business in these two countries and will therefore be affected by the war.
Aid authorized by the Commission
Thus, in her project, Margrethe Vestager, intends to authorize “temporary liquidity aid to all companies affected by the current crisis”. This aid could take the form of guarantees and subsidized loans, a bit like what many European governments, including France, had requested during the Covid crisis. The European Commissioner for Competition also provides that the States will be able to put in place “aid intended to cover the additional costs generated by the exceptionally high prices of gas and electricity”.
This “could be granted in any form, including limited subsidies, to provide companies, in particular large energy consumers, with partial compensation for increases in the price of energy”, specifies its initial project, published last week.
In Brussels, during a press conference, Bruno Le Maire, the French Minister of Economy and Finance, indicated that he would present this Wednesday at Matignon the various options to help companies in difficulty to pass this new test. . The Prime Minister’s arbitration will be rendered in stride.
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