Vestager Says Subsidy Restrictions Will Return Once Coronavirus Fades

Europe’s suspension of strict subsidy rules doesn’t mean a permanent shift away from banning governments from propping up companies, said the European Union’s competition czar.

The coronavirus pandemic has forced Margrethe Vestager to shelve her most potent weapon against alleged illegal subsidies. But the EU’s competition commissioner said she could return to enforcing state-aid prohibitions as soon as the start of next year.

Her ability to block government subsidies that the EU deems violate its strict state-aid rules allowed her in 2016 to demand Apple Inc. hand over more than $14 billion in taxes she said it owed Ireland.

As the pandemic halted Europe’s economy in March, those rules needed to be quickly relaxed, said Ms. Vestager. Since then, her office has approved billions of euros in government support to companies that weeks earlier would have been unthinkable.

EU subsidy rules aim to level the playing field for businesses across the 27-country bloc, which has worked for decades to fuse its disparate economies into a single, integrated marketplace. Ms. Vestager said the suspension represents a temporary, emergency reaction and not a fundamental policy change.

“We will never come back to a full, functional single market if we have no businesses to compete,” she said.

Full Content: Wall Street Journal

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