EU to start revising state aid rules in early 2021

The European Commission will launch a ‘comprehensive review’ of EU competition rules in early 2021, Ursula von der Leyen said on Friday (2 October).

Speaking after the EU summit in Brussels, Commission President Ursula von der Leyen emphasised the “need to ensure a proper level playing field” in the EU’s single market.

She added that the EU executive was planning to launch a comprehensive review of EU competition rules and on legislative proposals on foreign subsidies from third countries in the first half of 2021.

Prior to the COVID-19 pandemic, the Commission had been resisting pressure from a group of countries to overhaul its competition rules, with Germany, Poland, France, and Italy among a group calling on the Commission to make room for additional ‘flexibility’ in competition guidelines.

The Commission loosened its rules on state subsidies in March as a result of the economic devastation caused by the COVID-19 pandemic, allowing a series of public bailouts worth a total of €3 trillion of private firms,

Meanwhile, the EU executive announced on Friday that it had proposed to prolong the State aid Temporary Framework, adopted on 19 March 2020 to support the economy in the context of the coronavirus outbreak, until 30 June 2021. The move is likely to be endorsed by member states

In a statement, Commission Vice-President Margrethe Vestager said that the EU executive was “working on the way forward to enable Europe’s green and digital recovery”, adding that “our State aid rules will play an important role guiding Member States to ensure that limited public funds are well-targeted, do not crowd out private investments and seize the benefits of effective competition.”

President Von der Leyen also announced plans that the Commission would publish a monitoring report on the bloc’s single market early next year, with a view to removing “barriers notably in the areas of services and problems of implementation that deprive companies access to a wide and deep market.”

The Commission will also re-write its Industrial strategy for the bloc that was published in March at the start of the pandemic, Von der Leyen said. The blueprint was aimed at ensuring that European industry can lead the twin green and digital transitions.

“Clearly the last six months have accelerated the transformation and changed a lot. Supply chains have been disrupted, the lack of production facilities in the EU for certain critical products became an issue; remote digital working conditions became the norm for millions of workers,” Von der Leyen told reporters.

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