EC admits that Portugal is “at a disadvantage” in state aid

in News · 29-05-2020 01:00:00 · 0 Comments
EC admits that Portugal is “at a disadvantage” in state aid

The European Commission has admitted that countries like Portugal, with less budgetary capacity than Member States such as Germany or France, are “at a disadvantage” in state aid in the time of crisis generated by the pandemic, urging the application of “additional measures”.

“It is not a clear disadvantage, but of course there is a risk that [the country] will be at a disadvantage,” said executive vice president of the European Commission Margrethe Vestager in an interview with the Lusa agency in Brussels.
For Vestager, who is responsible for the “A Europe Prepared for the Digital Era” portfolio and for the protection of Competition at European level, there is “a risk” of countries like Portugal being at a disadvantage, but she maintains that “this depends a lot on the needs of each member state”.
Regarding the state aid already approved by Brussels under the temporary rules due to the Covid-19 pandemic, Margrethe Vestager observes that “there are Member States that are advancing with much less than Germany, France or Italy and they manage to value their money a lot”.
“Of course, it is different if [the country] can spend the equivalent of 0.5 percent or 2 percent of its Gross Domestic Product [GDP] compared to 10 percent or more,” she admits.
And to try to overcome these discrepancies in state aid, which are related to the countries’ budgetary capacity, Margrethe Vestager suggests the implementation of other types of support to economies in times of crisis.

“To these figures are added additional measures that do not provide state aid and that may be, for example, the suspension of payment of VAT [value added tax] or payment of IRC [corporate income tax], schemes to support the payment of salaries, among other things”, said the executive vice president of the European Commission.
Data provided by the European Commission to Lusa reveals that, so far, the Community executive has given the green light to a total of 136 decisions that approved 175 national measures for state aid, requested by Member States and the United Kingdom (economic partner region, although it is no longer part of the European Union).
Altogether, the amount of this State aid amounts to €2.13 billion, but this is a rounded sum that does not cover, for example, schemes without specific budgets and does not take into account the changes made afterwards to the amounts initially presented.
Even so, almost half (47 percent) of this state aid has already been requested by Germany, followed by Italy (18 percent), France (16 percent), Spain (4.3 percent), the United Kingdom (3.7 percent), Belgium (2.6 percent) and Poland (2.3 percent), according to data sent to Lusa.
The remaining countries - which include Portugal - represent a share of 0.1 percent to 1.5 percent of the estimated total, respectively.
Adopted in mid-March, this temporary European framework for state aid extends the support that Member States can provide to their economies in the time of crisis generated by the pandemic, in which many companies, especially small and medium-sized ones, face liquidity problems.
At stake are measures such as direct subsidies or support for tax benefits of up to €850,000 per company, public guarantees for loans and recapitalisations of companies, support that should be used only as a last resort.



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