The EU’s state aid regime is upside down

(EurActiv, 20 May 2020) The European Commission’s approach to state aid is contradicting green recovery ambitions. While the EU recovery programme is focused on the Green Deal, national subsidy schemes are pouring money all across the economy without clear ecological focus, writes Claude Turmes.

After the Franco-German deal announced on 18 May, the Commission is working on a green recovery programme. The objective is to rescue in an ecologically-responsible way European economies damaged by months of lockdown.

Ursula von der Leyen declared that the Green Deal should be the “motor for our recovery”. “We should avoid falling back in old, polluting habits”, she added. Executive Vice-President Timmermans was equally vocal on the topic, saying that “The Green Deal is not a luxury that we drop when we hit another crisis. It is essential for Europe’s future”.

It is widely acknowledged that a massive public intervention is essential, not only at European level through the recovery programme but also at national level through state aid. The Commission thus logically decided to loosen its grip on state aid and allow member states to bailout economic actors in a fast and ambitious way. As Ursula von der Leyen proudly said: “we gave full flexibility on EU fund and state aid rules”.

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EurActiv, 20 May 2020: The EU’s state aid regime is upside down