A big decision came from Brussels: member states can continue to distribute subsidies

By RockedBuzz 5 Min Read

After session with the member states, the European Commission amended the Temporary Crisis and Transition Framework (TCTF) on Monday rules in two areas as follows:

  1. Limited quantity of help (Section 2.1 of the Framework): This section might be prolonged by six months, till 30 June 2024. In addition, it’s outlined for grants of restricted quantity higher limits are raised to cowl the winter heating interval: from €250,000 to €280,000 for the agricultural sector, from €300,000 to €335,000 for the fisheries and aquaculture sector, and from €2 million to €2.25 million for all different sectors.
  2. Support to compensate for top vitality costs (part 2.4 of the framework): This part may also be prolonged by six months and can apply till 30 June 2024. According to this part, Member States can solely present help by masking a part of the surplus vitality prices till vitality costs considerably exceed pre-crisis ranges.

The fee announcement clarifies that the deadline for the opposite sections of the TCTF is not going to be modified, thus

  • Other sections of the framework associated to disaster administration (i.e. Sections 2.2 and a pair of.3 on liquidity help within the type of state ensures and sponsored loans, and Section 2.7 on measures to help the discount of electrical energy demand) is not going to be prolonged, i.e. December 31, 2023- I expire.
  • The sections of the framework which might be essential to additional decarbonize the European financial system and speed up the transition to a internet zero financial system (sections 2.5, 2.6 and a pair of.8) should not affected by right this moment’s modification , so they are going to stay in power till December 31, 2025.

The amendments simply introduced have been preceded by heated debates. Several Member States, together with Finland, Poland, Lithuania, Estonia and the Czech Republic he argued, that the distribution of those subsidies should be accomplished by the tip of this yr, for the reason that disaster scenario brought on by the Russian-Ukrainian battle and the interval of vitality value spikes have already ended, and it’s feared that the delay within the provision of varied subsidies will distort the one inner market an excessive amount of. However, Germany and France supported extending the applicability of the TCTF in sure areas, and the Commission subsequently waved the 3-month extension as a compromise resolution, however lastly determined that the extension could be 6 months till June 30, 2024.

The Commission justified the extension with two fundamental arguments:

  • “By partially adjusting the phase-out schedule of the Temporary Crisis and Transitional Framework, member states can keep their help programs for the following winter heating interval, as a security internet in case some firms continue to be affected by the financial disruption brought on by Russia’s battle towards Ukraine. At the identical time, the member states might be given extra time to implement the mandatory measures past the winter heating interval”.
  • “While general the danger of vitality shortages has decreased, together with due to measures taken by member states to diversify vitality sources, the Autumn 2023 Economic Forecast notes that Russia’s battle towards Ukraine and wider geopolitical tensions stay a threat and trigger uncertainty . Despite the general optimistic development, vitality markets stay susceptible”.

All of because of this, for instance, Germany additionally acquired time to pay the vitality value subsidies based mostly on the TCTF, though as we wrote in our different article right this moment: final week’s decision by the German Constitutional Court is a large blow to the funds, which additionally impacts the vitality value subsidy applications:

Cover picture supply: EU

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