Econostrum | Economic News in the Mediterranean

France authorised to release €7bn to support sustainable recovery investments

Written by Eric Apim on Thursday, April 21st 2022 à 16:25 | Read 242 times

The European Commission has authorised a €7bn French scheme to support sustainable recovery through investment.

The French government will be able to provide €7bn to support sustainable investments by its companies (photo: F.Dubessy)
The French government will be able to provide €7bn to support sustainable investments by its companies (photo: F.Dubessy)
FRANCE. On Thursday 21 April 2022, the European Commission authorised a €7 billion French investment aid scheme to support economic recovery. It will finance sustainable investments in tangible and intangible assets made by companies in the industrial sector. This includes companies in the research, machinery and equipment manufacturing and automotive sectors.

This decision is part of the European Union's temporary framework for state aid adopted in March 2020 to support the economy in the context of the coronavirus pandemic. It is motivated by the fact that "France will ensure that the investments financed are environmentally sustainable, in line with the EU taxonomy, and finance projects falling under the national "France 2030" plan, which aims in particular to reduce the carbon intensity of industries", the European Commission said in a statement.

The text also states that "the French measure was necessary, appropriate and proportionate to stimulate investment in certain branches of economic activity important for a sustainable recovery". The Commission stresses the compliance with the conditions set out in the temporary framework with an amount of aid per beneficiary that will not exceed 1% of the total budget, support that will favour investments in tangible and intangible assets but not financial investments, as well as a limit of 31 December 2022 for receiving this public aid.

Up to 1 000 beneficiary companies

The scheme will take the form of direct grants, subsidised loans, subsidised guarantees and repayable advances. All with conditions to limit any undue distortion of competition, including safeguards to limit the risk of possible indirect aid to the financial intermediaries channelling the aid.

According to the French government, up to 1,000 companies will be eligible for the €7 billion package. Each of them will be able to receive no more than €2.3m in direct grants and €2.3m in subsidised loans.

"The Commission fully supports Member States' efforts to bridge the investment gap created by the crisis. This €7bn scheme is an important step in that direction and will help France pave the way for a faster and more sustainable recovery. We continue to work closely with Member States to ensure that national support measures to revive and attract private investment can be put in place as quickly and effectively as possible, in compliance with EU rules," commented Margrethe Vestager, Executive Vice-President of the European Commission in charge of Competition Policy.

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