Economy Minister calls on EU to give member states more state aid ‘leverage’

Tight EU state aid regulations put member states at an unfair disadvantage when competing with foreign jurisdictions, Chris Cardona tells industry pundits

The EU has strict state aid rules that prevent governments from intervening in the market
The EU has strict state aid rules that prevent governments from intervening in the market

The European Union should give its countries’ governments more leeway when it comes to making decisions related to giving state aid to their industries, Chris Cardona said.

The Economy Minister said that the EU’s strict state aid rules could be placing member states at a very unfair disadvantage when it comes to competing with other jurisdictions in attracting investors.

Cardona was speaking on Thursday during a conference organised by The Malta Business Weekly on the challenges and opportunities faced by the industry of the future.

Under EU rules, it is illegal for member states to give financial help to some companies and not others in a way which would distort fair competition. The rules barring state aid are enforced by the European Commission and national courts.

But Cardona said that one of the main issues which should feature in discussions regarding the future of manufacturing should be an unfair position which the EU’s regulations on government intervention are placing Malta’s and other member states’ companies in.

“I believe the EU should give governments more leverage to decide what to do or not to do [regarding state aid],” Cardona said.

“This, I believe, should be one of the main themes which should be discussed in sectorial discussions on the manufacturing of the future, because we all know that we sometimes lose investment in our jurisdiction because the government can’t intervene,” he emphasised.

“And this is very unfair for European and non-EU investors who choose the Union as the place to base themselves in, as this means the EU’s platform is in a disadvantaged position compared to other [third] countries or regions which do not face this challenge.”

Cardona went on to acknowledge, however, that the situation when it comes to manufacturing in the EU was at present much better than it was 25 to 30 years ago.

“I remember when manufacturing was not part of the European narrative, and the EU seemed to focus only on services and financial institutions,” he pointed out.

“At least now we acknowledge the fact that manufacturing was, is, and will remain a major pillar for the European economy,” the minister added.

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