EU suggests relaxing rules to help its sanctions-hit companies

The European Commission on Thursday suggested temporarily relaxing the bloc's state aid rules so member countries could help companies facing liquidity problems due to sanctions on Russia. The EU executive said such support could take the form of guarantees and subsidised loans, and asked member states for feedback on the idea.

The European Commission on Thursday suggested temporarily relaxing the bloc's state aid rules so member countries could help companies facing liquidity problems due to sanctions on Russia.

The EU executive said such support could take the form of guarantees and subsidised loans, and asked member states for feedback on the idea. The move comes amid signs that the Ukraine conflict could cut the bloc's economic growth this year. The proposal could also make it easier for governments to offer grants to partially compensate intensive energy users facing high gas and electricity prices.

"We are ready to use the full flexibility of our state aid toolbox to enable member states to support companies and sectors severely impacted," the Commission's competition chief, Margrethe Vestager, said in a statement. EU countries were asked to comment on how much aid should be allowed, how to define energy-intensive users and whether aid to them should have environmental conditions.

The Commission also asked if agriculture would require other measures. It did not say how long any relaxation of the rules would last. The looser rules would be similar to those adopted for businesses hit by the pandemic two years ago. Then, governments pumped billions of euros into companies ranging from airlines to restaurants.