Brendan Howlin (Wexford, Labour)
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82. To ask the Minister for Enterprise, Trade and Employment if he has concerns regarding the negative impact on Ireland of the relaxation of EU State aid rules which has seen France and Germany account for 77% of the €672 million EU-approved programmes since 22 March 2022 following the Franco German Leaders’ meeting in Paris; the discussions he has had with other EU partners on this potential competitive distortion; and if he will make a statement on the matter. [4005/23]

Simon Coveney (Cork South Central, Fine Gael)
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Ireland has always been a strong supporter of robust State Aid control as this provides for a level playing field among member states and is the most suitable approach for small open economies like ours.

It is important to note that the figure of 77% of €672 million EU-approved programmes refers to approved budgets, and not what has been spent. Experience of the COVID-19 Temporary Framework has been that actual spend by member states is lower than the approved budgets. The Commission’s analysis of the use of the COVID-19 Temporary Framework concluded that the level playing field was not damaged on that occasion.

The ability to provide targeted State Aid in a crisis is important and the Covid-19 Temporary Framework and the current Temporary Crisis Framework show that these temporary frameworks allow the EU to offer timely flexibility when it is required. The current proposals go beyond this and there is a risk that if we normalise these extraordinary measures, we damage the level playing field that makes the EU strong.

For this reason, Ireland co-signed a joint statement with ten other member states, calling on the EU Commission to exercise caution in changing State Aid rules.

I also expressed my reservations about proposals to widen the scope of the Temporary Crisis Framework in my reply to Executive Vice President and Commissioner for Competition, Margrethe Vestager, on 25 January.

I attended the Informal Competitiveness Council in Stockholm on 7 February at which competitiveness, in the context of the green transition, was discussed. Ireland views a level playing field as a key support to competitiveness and productivity. The Council generally supported the need for a joined-up approach to ensure long term EU competitiveness, that is based on preserving the Single Market and the level playing field.

The Commission has since consulted Member States on draft proposals and my Department coordinated Ireland’s response calling for caution regarding the use of temporary crisis measures to support the Green Transition. We advised that the more permanent and stable General Block Exemption Regulation would be the more appropriate framework.