Brussels extends public aid to companies penalized by soaring energy prices

Companies facing soaring energy prices will continue to benefit from aid from European Union member states. The European Commission has in fact decided to extend the system by six months.



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The European Commission in Brussels.  (ZHAO DINGZHE/XINHUA)

This system was initially due to end on December 31, the postponement of the deadline therefore brings us to June 2024. A breath of fresh air for small companies as well as large groups, qualified as “electro-intensive” and which need a lot of energy to ensure their production. This ranges from the baker, whose bread oven consumes a lot of electricity, to heavy industry.

Crucial support

Continued support is valuable as geopolitical tensions continue to pose supply risks and energy markets remain vulnerable. The system put in place by European States, shortly after the outbreak of the war in Ukraine, allows the public authorities of the countries concerned to grant financial aid, in various forms, to compensate companies penalized by the increase in costs. gas and electricity prices. It’s more than a price shield. This is direct aid from the public authorities to cover part of the additional costs. For the moment, there is no quantified assessment, but, ultimately, this will amount to billions of euros for public coffers.

However, the European Commission sets a condition. EU Member States can continue to provide support to “electro-intensive” businesses only if the price of energy significantly exceeds pre-crisis levels. Public subsidies are strictly regulated by Brussels to limit distortions of competition between companies from different neighboring countries. Especially since some states are adding more to defend their industry. Germany, for example, announced on November 9 a plan of 30 billion euros until 2028 to support its businesses, based on subsidies and reductions in charges. Not all countries can afford it.

source site-25