The European Commission will end the relaxed state aid regime against COVID-19

BRUSSELS (AP) — The European Commission said Thursday it would phase out temporary rules that allowed the 27 EU member countries to receive additional public support during the coronavirus pandemic.

Adopted in March 2020, the so-called COVID State Aid Temporary Framework relaxed the European Union’s strict state aid regulations to help mitigate the impact of the pandemic.

In light of the improving economic situation in the region, coupled with the lifting of restrictions put in place to contain the spread of the virus over the past two years, the commission said a further extension of the program would not was not necessary.

The scheme will not be extended beyond its June 30 expiry date, but the commission insisted the phasing out will be gradual and businesses will not suddenly be cut off from support.

During the pandemic, the EU approved a multi-billion rescue package and member states agreed on an €1.8 trillion recovery plan and a long-term budget for 2021-2027.

To further ease pressure on hard-hit businesses, the bloc’s executive arm has relaxed strict state aid rules to allow for other possible sources of public support.

Margrethe Vestager, the European Commission’s executive vice-president in charge of competition policy, said the Commission had adopted more than 1,300 decisions in the context of the coronavirus pandemic, approving almost 950 national measures for a total amount approved estimated at more than 3,000 billion euros.

Of the total aid approved between March 2020 and June 2021, Vestager said around €730 billion had been spent so far.

Vestager said the Commission would be ready to “act quickly again if the need arises”, warning of the risks posed by the war in Ukraine for Europe’s recovery.

“Ukrainians are paying the highest price for Russia’s senseless and illegal war of aggression against their country,” she said. “At the same time, it creates disruption in the European economy and has a severe impact on the recovery.”

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