European Union member states doled out roughly €228 billion in state aid in 2022, a significant decrease of 34.8% compared to 2021, according to the recently published State Aid Scoreboard by the European Commission. This decline reflects a shift away from the exceptional support measures implemented during the peak of the COVID-19 pandemic.
However, despite the overall decrease, the report highlights the continued need for crisis relief. Over a third (€76.65 billion) of the total state aid provided in 2022 was directed towards mitigating the economic repercussions of the pandemic. This pandemic-related support, while significantly lower than 2021 figures, still represents a substantial investment in business continuity.
Furthermore, the war in Ukraine emerged as a new factor influencing state aid allocation in 2022. EU member states approved €39.33 billion in aid specifically designed to counter the economic disruptions caused by the conflict. This figure translates to roughly 17% of the total state aid dispensed last year.
"The State aid Scoreboard underlines the EU's commitment to supporting businesses through crises," remarked Margrethe Vestager, Executive Vice-President of the European Commission in charge of competition policy. "While aid related to the pandemic has decreased, the response to the war in Ukraine demonstrates our continued flexibility in ensuring economic stability."
The report also emphasizes that state aid goes beyond crisis response. While a significant portion addressed pandemic and war-related issues, the remaining funds were used to support various long-term objectives within the EU. These include promoting regional development, fostering innovation, and facilitating environmental sustainability.
The European Commission, responsible for overseeing state aid regulations within the bloc, maintains a cautious approach to ensure a balance between supporting businesses and fostering fair competition. The Scoreboard serves as a crucial tool for monitoring state aid expenditures and ensuring compliance with EU regulations.
Looking ahead, the future trajectory of state aid disbursement remains uncertain. While the urgent need for pandemic-related support has subsided, the ongoing war in Ukraine and its potential long-term economic consequences continue to pose challenges. The European Commission will likely need to maintain a degree of flexibility in its state aid policies to navigate these evolving circumstances.