EU to review rules on aid for struggling firms
The European Commission is seeking feedback on a review of the rules governing the aid that member states can provide for rescuing and restructuring struggling companies that are not in the financial sector.
It has launched a call for evidence and a public consultation that will influence the scope and content of its review.
The Rescue and Restructuring Guidelines, which came into force in 2014, set out the conditions under which aid to non-financial businesses that are in difficulty may be considered in line with EU rules.
The commission describes such aid as “among the most distortive types of state aid”, adding that the guidelines are aimed at ensuring that public funding is channelled where it is needed most – and that investors in failing firms carry their fair share of the costs, rather than leaving the burden to taxpayers.
Steel sector
The proposed review will look at:
- Expanding the scope of the guidelines to include the steel sector, which is currently excluded,
- Amending the ‘undertaking in difficulty’ (UiD) definition for certain types of innovative start-ups that have a specific growth model, which allows them to be eligible for aid under other state-aid instruments,
- Clarifying certain parts of the UiD definition, and
- Making technical changes after several judgments from the EU courts.
The deadline to reply to the call for evidence and the public consultation questionnaire is 14 November.
“Our revision of the Rescue and Restructuring Guidelines aims to align them with today’s economic reality, while recognising the big impact that rescue and restructuring aid has on competition,” said commissioner Teresa Ribera.