European Commission President Ursula von der Leyen has clarified how State aid rules apply to companies in financial distress, particularly in energy-intensive sectors such as steel, chemicals, and critical raw materials, responding to a parliamentary question from MEP Wouter Beke (PPE). Her answer does not propose immediate policy changes or specific numerical targets but outlines the Commission’s position and ongoing work. She emphasizes that companies classified as 'undertakings in difficulty' face structural insolvency and that State aid rules already allow certain support, including rescue aid and aid for decarbonization under current regulations. The Commission is revising the General Block Exemption Regulation (GBER) aiming to simplify rules and reduce bureaucracy, especially for SMEs.
This clarification comes amid broader EU efforts to address industrial competitiveness and housing affordability. On December 16, 2025, Executive Vice-President Teresa Ribera, acting as Commissioner for Housing, alongside Commissioner Jørgensen, unveiled a comprehensive European Housing Plan that includes a revision of State aid rules for affordable and social housing. That proposal removes previous maximum compensation caps, simplifies procedures, and installs safeguards such as a 20-year minimum project duration and enforceable price controls. While Ribera’s plan focuses on housing, von der Leyen’s response addresses industrial State aid, highlighting the Commission’s dual-track approach: easing support for strategic sectors like energy-intensive industries while tightening conditions for housing aid to ensure affordability and quality.
Von der Leyen’s stance is cautious, prioritizing the prevention of market distortion by limiting aid to companies nearing bankruptcy, while seeking to enhance support for energy-intensive sectors through existing amended guidelines that allow temporary and targeted aid. The policy maintains a balance between protecting competition and accommodating strategic sector challenges without broadly relaxing eligibility criteria. Key stakeholders affected include energy-intensive industries, which may gain some relief but remain restricted by strict insolvency definitions; national authorities tasked with administering aid under EU rules; EU taxpayers exposed to costs and risks of public support; and competitors whose market position depends on fair competition rules. The impact is mixed: while some aid flexibility is recognized, the fundamental boundary excluding insolvent companies remains firm.
The Commission’s ongoing GBER revision signals further developments expected within coming months, serving as a crucial indicator for future State aid frameworks relevant to Europe's industrial policy ambitions. This follows Ribera’s December 16 announcement of a parallel State aid simplification for housing, which also aims to reduce bureaucracy and increase flexibility for Member States and local authorities. Together, these initiatives reflect the Commission’s effort to tailor State aid rules to different policy objectives—industrial competitiveness and social housing—while maintaining overall market integrity.
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