THE EUROPEAN Commission has welcomed the Government’s €1 billion plan to offer temporary aid to firms to try to keep people in employment.
“We welcome in principle all actions taken to limit the impact of the crisis on jobs and to maintain viable jobs. It’s clearly better to have a job than not have one. We want to avoid long-term unemployment settling in,” said a spokeswoman for EU employment commissioner Vladimir Spidla yesterday.
She said the Government had not yet notified the commission about the full details of the plan. A final decision on whether it was compatible with EU state aid and competition rules could not be made until then, she added.
However, she said the commission had recently outlined its own proposals for dealing with rising unemployment, which included very similar schemes.
“They include support for schemes – including through the European Social Fund – to maintain viable employment through short-time work and training, as well as encouraging lower non-wage costs and recruitment incentives to get more people back into work,” the spokeswoman said.
The key test for the Government’s proposals to pass EU competition rules is that subsidies are: temporary; that they aim to keep workers in employment; and, critically, that they are offered equally to companies across the board.
The commission wants to ensure that governments do not attempt to use these types of subsidy schemes to prop up untenable businesses, which would probably go out of business due to competition despite the crisis.
Mr Spidla is expected to discuss the Government’s subsidy plan with Tánaiste Mary Coughlan when he visits Ireland next week. On the two-day visit Mr Spidla intends to visit the Moyross housing estate in Limerick.