Belgium, (Brussels Morning Newspaper) The European Commission has approved France’s aid scheme worth 1 billion euro to help companies weather the crisis.
In a statement released on Thursday, the body pointed out that the aid scheme was approved under the Temporary Crisis Framework, noting that the French economy is facing disturbances.
France will provide aid in the form of subsidized loans to companies outside the financial sector, with the EC stressing that the scheme is in line with EU rules.
Subsidized rates do not go below the minimum level allowed under the Temporary Crisis Framework, maturity does not exceed 8 years and loan amount per beneficiary is limited in line with EU rules.
According to France’s plan, companies will get access to loans of up to 2 million euros to cover their solvency needs for 6 to 12 months, depending on their size, with the Commission pointing out that aid will be provided by the end of next year.
Safeguards to protect competition
The body added that the French scheme includes safeguards to ensure the aid does not distort competition and added that the move will help companies cope with rising energy costs.
According to the EC, the French scheme is appropriate, proportionate, and necessary to address economic disturbances, and is in line with the Treaty on the Functioning of the EU.
The Commission reminded that it adopted the Temporary Crisis Framework in March this year to help businesses through the crisis, adding that the framework was amended in July and October to bring it in line with other EU measures.
Under the framework, EU member states can provide aid of up to 2 million euros to companies hit by the crisis. Bloc members can also provide solvency support in the form of subsidized loans and state guarantees.
The EC pointed out that the rules allow member states to compensate companies for soaring energy prices, stressing that the aid must incentivize businesses to lower energy consumption while ensuring the continuity of economic activities.
The body concluded that aid schemes also allow bloc members to strengthen the green push and diversify the energy supply with simplified tender procedures.
