On this September 17, the Minister of Economics Jānis Vitenbergs, in a telephone call with Margrethe Vestager, Deputy Executive Vice President of the European Commission, European Commissioner for Competition, discussed economic development and state aid measures for entrepreneurs during the Covid-19 crisis. The advisor to the Minister of Finance Ints Dālderis also took part in the conversation.
The Minister of Economics Jānis Vitenbergs: “In overcoming the crisis caused by Covid-19, it is essential not only to continue providing state aid to businesses, but also to prevent any distortion in freedom of the European Union’s single market and free competition. The European economic recovery requires an extension of functioning of the temporary state aid regulation to support companies at this difficult time.”
During the conversation, both sides emphasised the importance of a strong and coherent Single Market for Europe’s economic recovery. A faster economic recovery should strengthen four freedoms of the Single Market, despite the impact of Covid-19 by responding to the digital revolution in an innovative and climate-friendly way.
In his interview, the Minister of Economics emphasised the need to continue state aid measures for the tourism sector, where restrictions introduced due to Covid-19 continue to pose considerable risks and future uncertainties.
During the telephone call, the parties also discussed the new European competition policy initiatives – the White Paper on foreign subsidies in the single market and the new competition tool.
The Minister of Economics welcomed the need to address the problems identified in the White Paper on foreign subsidies, since the subsidies granted by countries outside the European Union (EU) to businesses in the EU have an increasing negative impact on the single market and competition. It is becoming increasingly apparent that foreign subsidies have helped to repurchase EU companies, have helped their beneficiaries to get a bigger market share, influence commodity pricing policies, distort competition in public procurement or have helped to absorb EU funds, thereby harming EU companies that have been denied such subsidies. At the same time, the Minister emphasised that the solution should not create an additional burden on EU companies.
The Minister also expressed his provisional support for the New Competition Tool, which the European Commission was planning to present next year. The tool aims to provide competition authorities with additional tools to tackle competition challenges created by big platforms, such as the use of market power by imposing unfair rules on their users, strategic takeovers of rival companies, limiting access to data, etc., leading to a lack of competition in markets.
At the end of the discussion, the Minister of Economic emphasised that, as a small and open economy dominated by small and medium-sized enterprises, it was particularly important for Latvia to ensure fair “rules of the game” for companies to enter and operate on such platforms and to ensure fair competition.