The EU wants to extend looser state aid measures for virus-hit businesses to mid-2022, limiting the EU's looseer state assistance rules for businesses that have been hit by virus outbreaks to the middle of 2022

The EU wants to extend looser state aid measures for virus-hit businesses to mid-2022, limiting the  ...

BRUSSELS, September 30, The European Commission proposed on Thursday extending looser state aid rules for virus-hit businesses for six months to June 2022 in order to slowly wean them off the billions of euros provided by governments across the European Union.

The EU executive, positioned to ensure a level playing field in the 27-country bloc, also proposed two new measures to encourage investment support and solvency support for resiliency for limited time to assist Europe recover from the COVID-19 epidemic.

The so-called Temporary Framework, which was adopted in March last year and will expire at the end of this year, has allowed EU nations to pump in over 3 trillion euros to thousands of businesses throughout the bloc.

"We need to be aware of disparities across member states and the need not to have cliff-edge consequences when removing public support," Commission vice-President Margrethe Vestager said in a statement.

"We are therefore proposing a progressive phase-out of crisis support measures that will allow member states and industry to adapt, as well as measures to kick-start and crowd-in private investments in the recovery phase," she said.

While the proposed investment support measures are intended for a large number of beneficiaries and should be limited in size, the solvency support measure is intended towards small- and medium-sized businesses that typically rely on bank loan financing.

Once EU countries provide feedback on the proposals, a final decision will be made.

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