In late December 2022, the European Commission invited EU member states to submit their views on the need to revise for a third time the Temporary Crisis Framework for State Aid measures (TCF), which was introduced to help member states address the financial impact of the war in Ukraine. Member states were asked to respond by 20 December 2022. The Commission argues that the regulatory framework of the TCF needs to be reviewed in response to European business facing the dual challenges of high energy prices and the US Inflation Reduction Act, (IRA), which includes incentives for investment and production of green technologies and which partly contains conditions that appear to discriminate against European actors.
The Confederation of Swedish Enterprise presents its response to the Commission’s request in the attached document.
Summary
- It is unsatisfactory to implement potentially far-reaching changes in regulations central to the workings of the single market without first analysing the underlying factors believed to justify such changes. Member states need to be given more time to collect information and review the need for regulatory changes in an appropriate manner.
- Swedish Enterprise believes that it cannot be deemed justified to make major changes to state aid rules due to the IRA. The effect the regulations have on competitiveness and investment should be reviewed in more detail. It should also be taken into account that EU member states already provide substantial amounts of state aid and that it remains unclear how the IRA will be implemented. It is also relevant to consider whether other measures would not be more effective in improving the competitiveness of European business, for example measures to address high energy prices.
- The TCF was created to deal with temporary cost pressures caused by the war in Ukraine. Industry’s fundamental long-term need for stable and favourable conditions to implement the green and digital transitions is not most effectively addressed by making changes to a temporary crisis framework; rather, this should be done through simplifications and clarifications to other, more long-term regulations.
- The competitiveness of EU businesses should mainly be improved through measures other than further watering down EU state aid rules. A greater amount of selective state aid risks causing increased distortion of competition in the single market and, in the long term, a less competitive and dynamic business climate in Europe.