Public support for companies should advance both short- and long-term goals for Europe’s economy. Aid must favour the best-in-class companies — those committed to carbon neutrality, resource efficiency and respect for social and labour standards. Without robust social and environmental conditionalities, subsidies risk propping vested interests, rent seekers and hindering innovation. Conditionalities are binding legal requirements on companies in receipt of public funding or other benefits to ensure that the supported activities also uphold Europe’s social and environmental objectives. They are a tool used by governments and financial institutions to shape the behaviour of public and private firms.
For a more impactful next long-term EU budget, we therefore call upon our national governments and the European Parliament to amend the legislative proposal for the next MFF to:
1. Integrate a horizontal social clause in the Performance Regulation.
2. Integrate social conditionalities for financial support to companies in the MFF, notably the Competitiveness Fund.
3. Include in the Performance Regulation a commitment by the European Commission to provide guidance on how to operationalize those social conditionalities.
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