Belgium, (Brussels Morning Newspaper) The European Commission has approved France’s state aid scheme worth 2 billion euros to support companies in the energy crisis.
In a statement released on Wednesday, the EC pointed out that the aid will be available to energy-intensive companies facing difficulties due to rising natural gas and electricity prices.
Public reinsurer Caisse Centrale de Réassurance is to administer the scheme, under which companies will receive public counter-guarantees to cover unfunded guarantees.
The EC pointed out that collateral requirements are increasing and noted that the scheme will help companies to stay afloat.
The scheme will be open to energy-intensive companies whose 2022 consumption exceeded 1 GWh, with the EC stressing that financial institutions are not eligible.
It will cover new energy supply contracts concluded between September 2022 and December 2023 that end on 31 December next year at the latest.
EC’s assessment
The Commission noted that the scheme is in line with EU rules and “well targeted to remedy a serious disturbance to the French economy.”
It will lower financial pressure on beneficiaries and address their liquidity issues while limiting undue distortions of competition, the body stressed.
Margrethe Vestager, European Commissioner for Competition, noted “with this 2 billion euro scheme, France will ensure that the energy-consuming companies can still meet the collateral requirements of their energy supply contracts, allowing them to continue their activities in the context of the current geopolitical crisis.”
The EC pointed out that the scheme will be provided under the Temporary Crisis Framework adopted in March last year to help bloc members provide support to their economies.
The framework was amended in July last year to align it with the EU’s green push and in October to address soaring energy prices. The body reminded that, under the framework, bloc members can provide limited amounts of aid to companies affected by the crisis.
The aid is to compensate companies for rising energy prices, with amount calculated based on beneficiaries’ past or present consumption.
The EC concluded that the framework allows measures aimed at strengthening the green push by phasing out the use of fossil fuels, improving energy efficiency or through electrification.
