February 21. 2024. 6:47

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It’s a Match!

Greetings from the European Council premises! While EU leaders are still too busy to discuss the economic future of the bloc, we at EURACTIV want to offer you, our esteemed Economy Brief reader, a quick guide on how to squeeze the most state aid out of your government.

EU competition chief Margrethe Vestager is not a fan of subsidies.

If this hadn’t been clear to you already, you could see it clearly when she announced changes to the EU’s state aid rules last week.

“At the end of the day, state aid is the transfer of money from taxpayers to shareholders,” she said, warning that her own proposals are “a serious risk to competition” and therefore ought to be ‘temporary’ – a word she repeated 14 times in her press conference.

But Vestager was under pressure from the German and French governments as well as their respective nationals within the Commission, who happen to be the Internal Market Commissioner Thierry Breton and the President, Ursula von der Leyen.

The new rules will, among other things, allow EU countries to ‘match’ foreign subsidies to prevent green tech production sites from being built abroad instead of within the EU.

So – if you happen to build a solar factory, a heat pump production, a battery plant or something similar – good news for you!

The principle, you might know from your Saturday shopping: When you tell the electronics store on the main street that a well-known (American!) online marketplace offers a cheaper price – and if you ask sufficiently politely – they might be willing to ‘match’ the price to keep you in the shop.

But just like in retail, where not every store will be able to afford to make such deals to keep you as a customer, not every EU country will be able to afford subsidy-’matching’.

Thus, over the last weeks, concerns were voiced that those countries with bigger pockets could benefit the most from such an option.

Above all is Germany, which accounted for over half of the state aid authorised in the EU under the current crisis emergency framework.

Vestager found a shrewd way aiming to prevent this from happening.

She limited the allowed amount of state aid that an individual country can grant per project to €100 million. Economically weaker regions will be granted more flexibility – with sums of €150 million or even €300 million allowed.

If you want to go above the 300 mark, you not only have to ask the Commission for individual permission, you stand no chance if you do not either plan your factory in one of the EU’s poorest regions – or if you find production sites in at least three other EU countries to partner up with.

And you better ask politely – you don’t want to end up being blamed for “blackmail” by German Handelsblatt.

Here are the lists of all the regions for each member state. You want to look out for category ‘a’ for everything above €300 million and category ‘c’ to at least get to squeeze €150 million out of your government.

To make your life easier and avoid spending hours making sense of the Commission’s literature database, please find below a map of countries that would be affected by the ‘go-alone’ limit.

EURACTIV did not get any response from the European Commission on whether this had anything to do with the fear of a German spending spree – but we expect that it wasn’t immune.

But before you run to your government now, keep in mind that this is just a proposal.

There’s still a summit of EU leaders happening today (9 February) which is meant to discuss the issue – EU leaders just have to finish their meeting with Zelenskyy and solve the migration issue first, but that shouldn’t take too long, right?

So maybe this is a good moment to first ask a foreign government what they have to offer.

The map shows which EU countries have so-called category ‘a’ regions, in which national governments would be allowed to match foreign subsidies even above €150 million on their own.

For investments in all other regions, member states have to work together – either with a category ‘a’ region in a different country or with at least 3 other member states.

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