The European Commission announced on Friday 2 October that it has sent Member States a draft proposal for consultation regarding the extension until 30 June 2021 of the State aid Temporary Framework (dated 19 March 2020) to support the economy in the context of the coronavirus pandemic. The aim is also to adjust the scope of this temporary framework.
Margrethe Vestager, Vice-President responsible for Competition Policy, noted that the temporary framework for state aid over the last seven months “has paved the way for almost €3 trillion of Member State potential support. The effects of the crisis will stay with us for a while”.
This draft proposal sent to the Member States aims to : - prolong at current limits existing provisions of the Temporary Framework (including for liquidity support) for an additional six months until 30 June 2021; - extend the scope of the Temporary Framework, taking into account the continued economic uncertainty and the needs of businesses with significant turnover losses, by enabling Member States to contribute to the fixed costs of companies that are not covered by their revenues; - adapt the conditions for recapitalisation measures under the Temporary Framework (in particular for the State's exit from enterprises where the State was an existing shareholder prior to the recapitalisation).
The proposed changes would allow the State to exit from the equity of such enterprises through an independent valuation, whilst maintaining the safeguards to preserve effective competition in the Single Market.
Member States now have the opportunity to comment on the Commission’s draft proposal. (Original version in French by Lionel Changeur)