The EU only used 12% of aid to companies in the first wave of infections

The European Union, and especially Germany, arrive with ammunition for the second wave of the pandemic.

During the first phase, from March to June, the governments used 346,000 million euros for aid to companies, only 12% of all the funds they have reserved to protect their productive system.

Spain was the country that made the most effort during that period, allocating 5.3% of its GDP to aid - mainly guarantees -, ahead of France (4.7%), Germany (2.8%) and Italy (1 , 6%).

Eurozone finance ministers will meet next week with a rather bleak outlook in sight.

"Recently we thought that we were in the phase of managing the way out of the crisis and now we see that we must face another time of difficulties," say diplomatic sources.

The Eurogroup will try to send the message that it already has the necessary tools to deal with this second wave of lockdowns.

"We should also make it clear that we are willing to take necessary measures if necessary," say sources from the Spanish Ministry of Economy.

European aid may still take months to arrive.

At least until autumn 2021. Therefore, the president of the Eurogroup, Paschal Donohoe, invites countries to continue to provide a security mesh for their companies.

The question was how far they had come so far, and how much muscle they will be able to extract, especially those whose already exceeds 100% of their Gross Domestic Product (GDP), such as Greece, Italy, Portugal or Spain.

Data from the European Commission indicate that, during the first wave of infections, countries allocated 346,000 million euros to State aid, just 12% of the 2.96 billion euros that Brussels has authorized to the Twenty-seven and the Kingdom United to support their economies.

The Executive Vice President of the European Commission, Margrethe Vestager, highlighted "the gap" between the amounts authorized and those disbursed.

“There can be many reasons.

Companies may have asked for less than expected, or the execution of those plans may have been slower, "Vestager said during a conference at a

Berlin

.

Another possibility that Vestager considered is that companies have opted for more general measures, such as aid to put jobs on hold to avoid layoffs, such as ERTE.

Germany is the country that has put the most support measures for companies on the table.

Specifically, 52.7% of the State aid approved by the Commission comes from Berlin;

15.2% from Italy;

14.1% from France, and only 5% from Spain.

However, the Commission asked the countries how much money they had disbursed of that amount up to June.

24 of the 27 countries answered.

And the classification drawn by those responses is different.

For now.

France granted 144,000 million euros to aid to companies, 33% of the total.

They are followed by Germany, with 96,000 million (28%);

Spain, with 69,000 million (20%), and Italy, with 27,680 million (8%).

"Preliminary data indicate that the real differences between the aid spent by the largest countries may not be as great as they initially announced," said Vestager, who highlighted that these four partners account for 90% of all EU State aid. .

Grants vs. endorsements

The data are also different if the aid destined is put in relation to the GDP of each country.

In that case, Spain has made the best effort.

The measures launched by the government are equivalent to 5.3% of GDP, ahead of France (4.7%), Germany (2.8%) and Italy (1.6%).

However, Vestager recalled that not all countries have opted for the same type of aid for their companies.

France, Spain, Sweden, Portugal and Romania have opted above all for guarantees and guarantees to mobilize bank financing.

Instead, Germany, Italy, Greece, Ireland or Portugal have opted for subsidies and, according to Vestager, "other types of non-reimbursable measures, which have potential longer-lasting effects on competition."

Brussels also considers that these differences between countries could be due to the fact that the regulation on the recapitalization of companies occurred in May.

"We have left the first kilometers behind but there is a marathon ahead," said Vestager, who advocated controlling the granting of these aid to avoid an "asymmetric recovery" that widens the divergences within the euro zone.