Massive state support propped up European businesses in 2021
25 April 2023, 22:19 CET
Bar person in pub - Photo by Darlene Alderson on Pexels
(BRUSSELS) - EU member states spent around EUR 335 billion under state aid measures in 2021, 57 per cent of which helped businesses seriously affected by the coronavirus pandemic to remain viable.
The European Commission published the 2022 State Aid Scoreboard on Monday, relating to state aid expenditure in 2021. The 2022 edition shows the contribution EU state aid policy made in enabling Member States to continue to support companies in the difficult economic context of by the pandemic, while preserving the level-playing-field in the Single Market.
The 2022 State Aid Scoreboard shows in particular, that, for 2021 aid expenditure:
- Member States spent €334.54 billion, about 2.3% of their combined 2021 GDP, on State aid for all objectives, excluding aid to railways and SGEI'. The total expenditure for measures relating to the economic effects of the coronavirus pandemic reached €190.65 billion (about 57% of the total State aid spending), while public support for other measures not related to the coronavirus pandemic was €143.89 billion (about 43% of the total spending).
- Compared to 2020, in 2021 State aid expenditure by Member States decreased by -1.9% after adjusting for inflation (i.e. €6.17 billion). More specifically, the expenditure related to the COVID-19 crisis increased by 4.7% in constant prices (i.e. €8.6 billion) and support for other measures decreased by 1.7% (€2.43 billion).
- For what concerns State aid expenditure in the context of the coronavirus pandemic, Malta and Greece are the Member States with the largest share of COVID-19 related State aid expenditure relative to their 2021 national GDP (2.48% and 2.46% respectively), followed by Austria (2.1%), Slovenia (2%), Latvia and Slovakia (both around 1.9% of their GDP), and by Germany (1.8%). Sweden (0.21%) and Belgium (0.22%) are the Member States that spent least in relative terms, followed by Estonia and Ireland (0.4% each).
- For what concerns State aid expenditure for non-coronavirus crisis objectives:
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- EU 27 Member States spent €143.89 billion on State aid for other measures not related to the coronavirus pandemic, corresponding to 0.99% of EU27 2021 GDP and 43% of the total spending. This constitutes a decrease compared to 2020 figures, while the average annual change recorded in the period 2015 – 2020 had always remained positive. This seems to indicate that in 2021, with the continuation of the COVID-19 crisis and the consequent need to prolong the granting of aid measures in the context of the coronavirus pandemic, Member States have slightly reduced their spending capacity for non-crisis objectives.
- In line with previous years, also in 2021 environmental protection and energy savings are the (non-crisis-related) policy objectives on which Member States by far spent the most (€69 billion). Research and development, including innovation, has become the second objective on which Member States have spent the most (€18.77 billion, an increase of €6.48 billion compared to 2020), followed by regional development (€14.21 billion).
- In a continuing trend, Member States are increasingly using the General Block Exemption Regulation ('GBER'), which provides scope for certain measures with limited impact on the internal market to be implemented without prior approval by the Commission, as well as other sectoral block exemptions (i.e. Agricultural Block Exemption Regulation ('ABER') and Fishery Block Exemption Regulation ('FIBER')). In 2021, Member States implemented 2,365 new GBER, 296 new ABER and 29 new FIBER measures, corresponding altogether to 83% of all new State aid measures. Excluding the measures related to the COVID-19 crisis, ABER and FIBER, the new GBER measures account for 93% of total new non-crisis measures. Furthermore, the expenditure under GBER measures increased in 2021 with respect to the previous year (+10%, €5.8 billion in real terms), thus showing a higher increase than the one realised in the two years before (+6% in 2020 and +8% in 2019), in contrast to the general reduced spending capacity for non-crisis objectives.