COVID-19: the first State aid measures approved by the Commission

In the wake of the publication of the Temporary Framework (see our article of 20 March 2020), the European Commission has already adopted an impressive number of decisions in application of the Temporary Framework as set out below. In addition, the Commission has also approved two State aid schemes that concern the compensation of direct damages (outside the context of the Temporary Framework). Thus, on 12 March, the Commission approved the Danish State aid regime aimed at compensating for the cancellation of events and on 25 March, the Commission approved another Danish State aid scheme granting direct grants to self-employed individuals to compensate for losses of turnover.

Aid in form of direct grants, repayable advances or tax advantages

On 22 March, the Commission approved an Italian State aid scheme that makes financial support available to companies in support of these companies switching to or increasing the production of medical devices and personal protection equipment.

On 24 March, the Commission approved a Luxembourg State aid scheme concerning a repayable advance to companies affected by the economic impact of the COVID-19-crisis. In addition, the Commission approved the German scheme that gives up to €800,000 in direct grants per company.

On 25 March, the Commission approved a UK direct grants scheme (via the British Business Bank) to support SMEs.

On 30 March, the Commission approved a French State aid scheme in the form of direct grants to SMEs and self-employed people.

Aid in the form of guarantees on loans

On 21 March 2020, the Commission approved a French guarantee schemes to banks on portfolios of new loans for all types of companies. In addition, the Commission approved a Danish guarantee scheme for SMEs affected by the COVID-19-crisis.

On 22 March, the Commission approved four Portuguese guarantee schemes for SMEs affected by the COVID-19-crisis and active in the tourism, restaurants and extractive and manufacturing industries.

On 23 March, the Commission approved a Latvian loan guarantee scheme for companies affected by the COVID-19-crisis.

On 24 March, the Commission approved a German guarantee scheme providing guarantees on loans at favorable terms. The Commission also approved two Spanish guarantee schemes on new loans and refinancing operations for self-employed workers, SMEs and larger companies.

On 25 March, the Commission approved an Italian guarantee scheme to support a debt moratorium for SMEs.

Finally, on 27 March, the Commission approved a Luxembourg guarantee scheme open to all companies, except those active in the promotion, renting and sale of buildings as well as holding of investments.

Aid in the form of subsidised interest rates for loans

On 23 March 2020, the Commission approved the Latvian subsidised loan scheme for companies affected by the COVID-19-crisis which also concerned guarantees at reduced guarantee fees on loans with limited maturity and size.

On 22 March 2020, the Commission approved a German loan programme covering up to 90% of the risk for loans for companies of all sizes. An additional support measure in this context was approved by the Commission on 24 March 2020.

Aid in the form of guarantees and loans channeled through credit institutions or other financial institutions

On 21 March 2020, the Commission approved two French State aid schemes which enable the French public investment bank Bpifrance to provide State guarantees on commercial loans and credit lines, respectively, for companies with up to 5,000 employees.

On 22 March 2020, the Commission approved a loan programme in which the German promotional bank Kreditanstalt für Wiederaufbau participates together with private banks to provide larger loans as a consortium. An additional support measure in this context was approved by the Commission on 24 March 2020.

On 25 March, the Commission approved a UK guarantee scheme (via the British Business Bank) to support SMEs.

Short-term export credit insurance

On 27 March 2020, the Commission announced that is has temporarily removed all countries from its list of ‘marketable risk’ countries making public short-term export credit insurance more widely available.

State aid by EFTA countries and further developments

The EFTA Surveillance Authority follows the EU approach and has approved a Norwegian guaranteed scheme regarding investment and working capital loans.

The COVID-19 State aid context is changing constantly. On 27 March, the Commission started consulting Member States on a proposal to extend the Temporary Framework to cover (i) measures supporting R&D, testing and production of products relevant to tackle the COVID-19 virus and (ii) measures designed to save jobs (e.g. wage subsidies). This proposal is expected to be adopted in the coming days.

We continue to closely monitor the situation. In Brussels and elsewhere in our network, we have a dedicated group of EU State aid experts able to guide companies and public authorities through the maze of EU State aid law and to assist in the procedure before the Commission.

Should you need assistance, have any further questions regarding this client alert or State aid generally, please do not hesitate to contact any of the individuals listed or your usual contact within the firm.