EU Relaxes State Aid Rules to Help Nations Combat Virus Crisis
European Union regulators relaxed strict state-aid rules to give governments “full flexibility” to support the economy
(Bloomberg) -- European Union regulators relaxed strict state-aid rules to give governments “full flexibility” to support the economy after the coronavirus forced nations to shut down swathes of industry.
“We need to act fast to manage the impact as much as we can,” Margrethe Vestager, the European Commission’s executive vice-president, said in an emailed statement on Thursday.
European governments can now grant up to 800,000 euros ($853,400) to help companies cope with “urgent liquidity needs,” according to the commission. This funding could go to transport, tourism, hospitality and retail, the EU authority said.
Governments can also permit state guarantees to ensure banks keep lending and allow loans with subsidized interest rates to companies. The rules also allow more flexibility on short-term export credit insurance.
Citizens and businesses across Europe are facing weeks if not months of unprecedented curbs on their daily activities. While companies try to cope with a collapse in demand and production halts, governments are struggling to keep economies in position to recover.
The new rules recognize “that the entire EU economy is experiencing a serious disturbance,” the commission added. The looser legal framework expires in December. EU aid rules usually prevent governments aiding one firm over rivals in the 27-nation bloc.
The European Central Bank’s president earlier pledged “no limits” to helping the European economy with an extra emergency bond-buying program worth 750 billion euros. The number of dead in Italy surpassed those in China on Thursday as the global pandemic’s spread accelerates.
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