On Friday 3 April, the European Commission formally adopted amendments to the Temporary Framework of 19 March 2020 on state aid in order to allow Member States to accelerate research, testing and production of coronavirus-related products, protect jobs and provide further support for the economy during the pandemic.
The amended Temporary Framework “complements the many other possibilities already available to Member States to mitigate the socio-economic impact of the coronavirus outbreak, in line with EU state aid rules”, the Commission said.
Margrethe Vestager, the Executive Vice-President responsible for competition policy, welcomed the changes, as they will particularly allow Member States to support companies that develop and manufacture much needed products to fight the coronavirus, such as vaccines, medicines, medical devices, disinfectants and protective equipment.
On 19 March, the Commission adopted a new Temporary Framework for state aid to support the economy during the coronavirus epidemic, using Article 107(3)(b) of the Treaty on the Functioning of the European Union as its basis. The Temporary Framework allows five types of aid to be granted, including aid in the form of direct grants, repayable advances or tax benefits (see EUROPE 12450/7).
Following consultation with Member States, the Commission has endorsed an amendment to the Temporary Framework that adds another five types of aid: - support for research and development (direct grants, repayable advances or tax benefits, and bonuses); - support for the construction and upscaling of test facilities (medicines, including vaccines, treatments, medical equipment, including ventilators); - support for the manufacture of products that can be used to tackle the pandemic; - targeted support in the form of deferral of tax payments and/or suspension of social security contributions (in the most seriously affected sectors and regions); - targeted support in the form of wage subsidies for employees.
The amendment also expands the types of aid that Member States can provide to companies in need. For example, it now allows Member States to grant interest-free loans and guarantees on loans covering 100% of the risk, and allows them to provide equity up to the nominal value of €800,000 per company. This measure may also be combined with what is known as de minimis aid (to bring the aid per firm up to €1 million), and with other types of aid.
The amendment to the Temporary Framework will be in place until the end of December 2020. In order to ensure it is legally watertight, the Commission will make an assessment before that date to decide whether it should be extended. (Original version in French by Lionel Changeur)