State aid: Commission approves €7 billion French scheme to support investment towards a sustainable recovery

The European Commission has approved a €7 billion French scheme aimed at providing investment support towards a sustainable recovery. The scheme was approved under the State aid Temporary Framework.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The Commission fully supports Member States’ efforts to bridge the investment gap left behind by the crisis. This €7 billion scheme is an important step in this direction that will help France set the path for a faster and more sustainable recovery. We continue working in close cooperation with Member States to ensure that national support measures to kick-start and crowd-in private investment can be put in place as quickly and effectively as possible, in line with EU rules”.

The French support measure

France notified to the Commission under the Temporary Framework a €7 billion scheme aimed at providing investment support towards a sustainable recovery.

Under this measure, the aid will take any of the following forms: (i) direct grants; (ii) subsidised interest rates loans; (iii) subsidised guarantees; and (iv) repayable advances. The individual aid amount will not exceed €70 million per beneficiary.

The public support will be used to finance sustainable investments in tangible and intangible assets made by companies in the industrial sector, including in the chemical industry, machinery and equipment manufacturing and in the automotive industry.

France will ensure that the financed investments are environmentally sustainable, in line with the EU taxonomy, and financing projects falling under the “France 2030” national plan, which aims among others at reducing the carbon intensity of industries.

The public support will come with strings attached to limit undue distortions of competition, including safeguards to limit the risk of possible indirect aid in favour of the financial intermediaries channeling the support.

The scheme is expected to benefit up to 1000 companies.

The Commission found that the French scheme is in line with the conditions set out in the Temporary Framework. In particular, (i) the aid amount per beneficiary will not exceed 1% of the total budget; (ii) the aid will benefit investments in tangible and intangible assets but not financial investments; and (iii) the public support will be granted no later than 31 December 2022.

The Commission concluded that the French measure is necessary, appropriate and proportionate to foster investment for certain economic activities of importance for a sustainable recovery, in line with Article 107(3)(c) TFEU.

On this basis, the Commission approved the aid measure under EU State aid rules.