EU Commission ready to relax state‑aid rules for SMEs, social housing and agriculture

Brussels – Greater flexibility on research and development, environmental protection, renewable energy, agriculture, as well as social housing, and energy efficiency. Always with a focus on small and medium-sized enterprises. Today (February 25), the European Commission submitted a draft of the review of state aid rules for public consultation: Member States and stakeholders will be able to submit their comments on the text to Brussels until April 23.

In particular, the amendment concerns the so-called General Block Exemption Regulation (GBER), which defines which state interventions in the national economy are exempt from prior notification and approval by Brussels. It essentially allows Member States to quickly provide aid if conditions that limit distortions of competition in the Single Market are met. Already today, 69 per cent of all state aid granted by national governments falls under the GBER. 

The Commission, which has already amended the GBER several times, the last in 2023 to facilitate aid to key sectors of the green transition, now aims to streamline the regulation, reducing administrative burdens and allowing for greater flexibility. The aim is to adopt it by the end of the year, when the current restrictions expire. “This rulebook will make it easier and faster for Member States to boost the competitiveness of our industries, including SMEs, without having to wait for State aid approval,” the European Commission Executive Vice-President Teresa Ribera said.

The EU executive’s principle is to ensure “simpler access to state aid, in particular for small mid-caps or social enterprises.” The draft includes “more flexible risk-finance instruments or aid in the form of favourable tax treatment of share options and warrants for employees” for SMEs and social enterprises. The granting of aid in the field of renewable energy will become “simpler and possible on a larger scale.” The Commission proposes to remove the 300 million per year ceiling for each country. 

As in the EU housing plan, the Commission proposes, for the first time, relaxing state aid restrictions to tackle the housing crisis, allowing “higher aid” for energy efficiency measures, social housing projects, affordable housing projects, and social enterprises providing housing.

The review, launched to boost European competitiveness, proposes including “young, innovative firms with a weak equity basis or that spend cash reserves for product development ” in the framework of aid for research and development. It also suggests facilitating the granting of aid “for training workers in digital and STEM skills.” And it gives special consideration to agricultural production and fisheries, allowing Member States to choose whether to grant aid to these sectors under the GBER or the sectoral block exemptions.