The European Commission sent to Member States for consultation, on Thursday 9 April, a draft proposal to extend the scope of the Temporary Framework for State Aid to recapitalisation measures (already amended on 3 April: https://bit.ly/2JNBEXr ) to support the economy in the context of the COVID-19 outbreak.
The Commission proposes to further extend the scope of the Temporary Framework by allowing Member States to grant recapitalisations to companies in need.
Since such public interventions may have a significant impact on competition in the Single Market, they should remain measures of "last-resort". They will also be subject to clear conditions as regards the State's entry, remuneration and exit from the companies concerned.
The Commission is proposing a number of safeguards on the conditions for granting State Aid as well as for the behaviour of the companies benefitting from it, both on the market and in terms of their governance.
In addition, the draft proposal aims to ensure that the State is sufficiently remunerated for the risks it assumes.
Finally, it also requires Member States to develop an exit strategy, in particular from large companies that have seen a higher equity participation by the State, with the goal of making sure that they can return to viability without further need for State support when the economy has stabilised.
After consultation with the countries, the new framework will soon be published by the Commission. (Original version in French by Lionel Changeur)