VIENNA (Reuters) - Austria said on Monday it wants the European Union to suspend its rules on state aid so that Vienna can prop up companies during the coronavirus pandemic without having to seek permission from Brussels.
Austria is one of the self-described ‘frugals’ within the bloc, net contributors to the EU budget that eventually backed a rescue package for member states hardest hit by the outbreak while opposing the idea of mutualised debt, or ‘euro bonds’, to fund it.
Now conservative-led Austria says that in return the bloc should suspend state aid rules aimed at preventing countries from giving firms an unfair advantage, so that it can freely implement its plan to spend roughly a tenth of last year’s economic output on keeping its economy ticking over.
“This solidarity cannot be a one-way street. We also want to be able to show solidarity with our own companies, and we therefore demand that this crisis be used for solidarity in that we suspend the EU state aid regime for the duration of the crisis,” Austrian Finance Minister Gernot Bluemel told a news conference.
“I have no understanding for a situation where we support other countries with Austrian tax money and in return we are banned from supporting our own companies with our own tax money. That cannot be,” he added.
New economic aid instruments must be submitted to Brussels for approval and are often subject to complex negotiations, Bluemel said, adding that a suspension would “significantly simplify the process”.
Reporting by Francois Murphy; Editing by Toby Chopra & Simon Cameron-Moore