Policymakers have unveiled a comprehensive support package targeted at helping firms struggling financially in response to the extraordinary spike in energy costs that is affecting enterprises throughout the European Union (EU).
The decision was made at a time when many European businesses are facing financial instability due to rising energy costs that are being made worse by supply chain disruptions and geopolitical concerns.
A week ago, the European Commission adopted a “€3 billion Austrian State aid scheme to support companies facing increased energy costs in the context of Russia’s war against Ukraine.”
The approved plan consists of two parts: allowing enterprises limited financial assistance to offset the higher costs of using different energy sources and extending financial assistance to cover additional costs brought on by unusual increases in the price of natural gas and electricity. The assistance will come in the form of direct grants in both situations.
Additional aid, up to a maximum of €100 million and no more than 40% of the eligible costs, may be given to the beneficiaries. Aid up to 65% of qualified costs is available to energy-intensive firms, with a maximum aid ceiling of €50 million. Furthermore, energy-intensive businesses operating in highly impacted industries will be eligible for aid up to 80% of qualified costs, with a maximum aid ceiling of €150 million.
Reuters reported on Monday that in order to compensate the EU countries for the increased energy prices sparked by the Russian invasion of Ukraine, the European Commission extended the loosening of state aid rules.
This, according to the Commission, “will allow the Member States, where needed, to extend their support schemes and ensure that companies still affected by the crisis will not be cut off from necessary support in the upcoming winter heating period.”
Business leaders have responded to the statement with cautious optimism, applauding the EU’s proactive measures to address the current issues while laying out a roadmap for a more resilient and sustainable economic future.
