Prolongation of the Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty
On 13 October 2025, the European Commission published a communication extending the application of the Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty until 31 December 2026. Originally set to expire at the end of 2025, this prolongation ensures legal continuity and predictability while the Commission undertakes a comprehensive review of the framework.
Context
In force since 2014, the Guidelines set out the compatibility conditions for public support given to companies facing serious financial difficulties. Rescue and restructuring aid is one of the most distortive forms of State aid, as it can hinder market efficiency by keeping less competitive firms afloat and slowing sectoral growth. To mitigate these risks, the Guidelines introduce safeguards to ensure that aid is granted only under conditions that minimise adverse effects and promote the efficient use of public resources.
Upon compliance with the conditions provided by the Guidelines, rescue and restructuring aid can be declared compatible with the common market by the European Commission upon notification by the Member States concerned.
Ongoing revision
The European Commission is currently revising the Guidelines. This revision follows a 2020 evaluation conducted as part of a broader review of the State aid framework. While the assessment confirmed that the Guidelines are generally adequate, it also identified areas requiring clarification and technical updates. In response to these findings, as well as to shifting market dynamics and geopolitical developments since 2014, the Commission initiated a revision to ensure that the Guidelines remain effective, proportionate and consistent with broader EU policy objectives.
A central issue in the review is the definition of what constitutes an “undertaking in difficulty”, as only entities meeting this criterion are eligible for support under the Guidelines. The current wording has led to inconsistent interpretations, allowing some firms, such as innovative start-ups with high early-stage costs, to qualify for aid despite not being genuinely at risk. The Commission aims to introduce a clearer, more objective definition targeting undertakings facing imminent operational failure.
The proposed revision also includes the possible extension of the sectoral scope to cover the steel industry, which is currently excluded. In addition, technical adjustments are being considered to ensure consistency with recent EU Court rulings.
Overall, the revision aims to modernise the rules in line with today’s economic realities, while acknowledging the significant impact that rescue and restructuring aid can have on competition.
Next steps
As part of the revision, the Commission launched a call for evidence and public consultation on 22 August 2025. Stakeholders are invited to submit their views on the scope and content of the future rules. Contributions can be submitted until 14 November 2025. A summary of responses will then be published and used for preparing the updated Guidelines.
The temporary extension of the Guidelines is purely a pragmatic measure to avoid a regulatory gap after 31 December 2025 and to ensure legal certainty throughout the transition period.
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Below is a link to the CMS expert guide on State aid: State aid legal guide | CMS Expert Guide
