Sir, – Further to Sharon Higgins's calls for the Government to take "direct fiscal interventions to help ease the burden of increasing energy costs" for the manufacturing sector, it is important to note that, unless they are granted in relatively low amounts according to conditions set out in certain regulations, any such interventions are likely to constitute state aid ("Energy cost inflation must be eased on manufacturing now", Business, Opinion, April 25th).
While it remains open to the Irish Government to intervene in this way, any grant of aid must be notified to and approved by the European Commission according to its policies before it is implemented.
It is perhaps for this reason that Ms Higgins also urges the Government to seek to adopt a “common emergency aid framework to support business across the continent through this period of volatility and exceptional costs” together with the EU.
However, it appears that such an instrument already exists.
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The European Commission adopted a temporary framework last month to allow for the approval of aid designed to address the severe increases in energy prices arising from Russia’s invasion of Ukraine.
For example, this framework permits aid to be granted in a variety of forms to address rising energy costs in amounts of up to €2 million per business in most sectors before the end of the year. Aid of up to €25 million per business can be permitted for businesses in very energy-intensive industries which will inevitably include many firms in the manufacturing sector. While the Government would have to notify these supports in advance, the European Commission has indicated that it is likely to prioritise the review of aid that is designed to address these difficulties. This already appears to go some way towards facilitating governments to grant-aid to respond to these challenges and support the manufacturing sector. – Yours, etc,
CHRISTOPHER
McMAHON,
Adjunct Assistant Professor,
School of Law,
Trinity College Dublin,
Dublin 2.