The European Commission has launched a review of the Rescue and Restructuring Guidelines. The revision is intended to adjust the framework to reflect market developments and the changed geopolitical environment since 2014. Stakeholders are invited to submit contributions until 14 November 2025.
Background
The Rescue and Restructuring Guidelines (the "R&R Guidelines") establish the conditions under which Member States may grant State aid to undertakings in difficulty in line with Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU). The original R&R Guidelines were adopted by the Commission in 1994 and were replaced in 2014. The current R&R Guidelines were initially due to expire end-2020 but were extended to 2026.
The R&R Guidelines impose strict safeguards, as rescue and restructuring aid is considered to be highly distortive to competition. The R&R Guidelines aim to ensure that aid is limited in scope and duration to target support only where it is most necessary. The R&R Guidelines also aim to ensure that investors and shareholders bear a fair share of restructuring costs, rather than shifting the burden onto taxpayers.
The R&R Guidelines currently provide a framework for three types of support measures, namely rescue aid, restructuring aid and temporary restructuring support. A key element in the review of the R&R Guidelines is the definition of what constitutes an "undertaking in difficulty", as only undertakings meeting this definition may benefit from State aid under the R&R Guidelines.
The R&R Guidelines apply to all sectors except coal, steel and financial services, as these sectors are subject to separate rules: in essence, coal aid is only permitted for the purpose of phasing out the sector, steel has traditionally been excluded due to its particular sensitivity to competition distortions, and financial institutions are covered by a dedicated set of State aid rules developed after the financial crisis.
In 2020, the Commission reviewed the R&R Guidelines as part of the broader State aid Fitness Check, which highlighted areas where clarification and technical updates were needed. This review and the significant changes in market conditions and the geopolitical landscape that have occurred since 2014 have prompted the Commission to launch this revision of the R&R Guidelines.
The European Commission's review
As part of the planned revision, the Commission is considering the following amendments:
- Sectoral scope: extending the R&R Guidelines to include the steel sector, which is currently excluded from the regime;
- Definition of "undertaking in difficulty": refining the definition to cover certain innovative start-ups with specific growth models, and clarifying elements of the definition, in particular the concept of "own funds" and its relationship with equity and solvency; and
- Technical adjustments: alignment in light of recent case law from the EU Courts.
Through this process, the Commission seeks stakeholder input to ensure that the revised framework remains effective, proportionate, and aligned with broader EU policy objectives.
Plesner comments
The update of the R&R Guidelines is intended to ensure that State aid control remains responsive to economic developments and legal certainty needs. The proposed extension to the steel sector reflects not only its strategic significance in the European economy, but may also be seen in light of recent geopolitical developments, including global trade tensions such as the U.S. tariffs on steel imports.
Early feedback to the Commission has so far been limited. However, the responses received so far already highlight the political complexity of rescue and restructuring aid and underline the need to update the R&R Guidelines to reflect evolving market conditions and geopolitical realities.
Some stakeholders have criticised the definition of "undertaking in difficulty" as ill-suited for certain companies - such as start-ups, tech firms using venture capital, public entities, or NGOs. In particular, the so-called "disappearing capital criterion" (where more than half of the undertaking's subscribed share capital has disappeared due to accumulated losses) has been seen as overly conservative, often classifying otherwise viable firms as "in difficulty" despite no genuine risk of default.
We encourage stakeholders, including companies, public authorities, and industry organisations, to engage with the consultation and share their perspectives. Responses can be submitted via the Commission's dedicated platform until 14 November 2025.
Read the European Commission's press release
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