As part of trying to mitigate the economic impact of the current Covid-19 outbreak/pandemic and the knock on effect this has already had on the private sector in the EU, the European Commission has today proposed temporary revisions/changes to the state aid framework. This would enable Member States to take more supportive actions with regard to the private sector without breaching EU state aid rules.

The draft framework has been sent to Member States for consultation and the Commission is signalling that it intends to have these temporary measures in place within the coming days.

You can find a statement from the Executive Vice-President Margrethe Vestager on this subject here: link

What is being proposed:

  1. Allowing Member States to provide direct grants or tax advantages to companies. Grants or tax advantage can be to individual companies and up to an amount of EUR 500.000 to enable companies to manage liquidity short falls.
  2. State guarantee scheme for company bank loans with subsidised premiums
  3. Enabling measures to provide public or private loans to companies with subsidised interest rates, which cannot be lower than the base rate on 1 January 2020 plus the commensurate credit risk premium. Such loans can cover both investment and working capital needs of companies.
  4. Member States would be able to channel direct aid into the economy by means of the banking sector without any financial aid in that regard breaching state aid rules vis-à-vis banks.

Recent News

View all News