The European Commission announced on Tuesday 13 October that, after a consultation with Member States (see EUROPE 12573/16), it is extending the Temporary Framework for state aid put in place during the coronavirus pandemic. All sections of the Temporary Framework are prolonged for 6 months, until 30 June 2021, and the section to enable recapitalisation support is prolonged for a further 3 months until 30 September 2021.
Executive Vice-President Margrethe Vestager, who is responsible for Competition Policy, says that the European Commission is introducing a new measure to enable Member States to support companies facing significant turnover losses by contributing to part of their uncovered fixed costs. “Finally, we are introducing new possibilities for the State to exit from recapitalised companies while maintaining its previous stake in those companies and limiting distortions to competition”, she explained.
The temporary framework was initially set to expire on 31 December 2020, except for recapitalisation measures that could be granted until 30 June 2021. The amendment extends at current thresholds the provisions of the Temporary Framework for an additional 6 months until 30 June 2021, except the recapitalisation measures which are prolonged for 3 months until 30 September 2021.
Before 30 June 2021, the Commission will review and examine the need to further prolong or adapt the Temporary Framework.
Support for uncovered fixed costs of companies. A new measure is introduced to allow Member States to support companies facing a decline in turnover of at least 30% during the eligible period compared to the same period in 2019 due to the pandemic. This support will contribute to part of the beneficiaries' fixed costs that are not covered by their revenues, up to a maximum of EUR 3 million per undertaking.
Exit of the State from previously State-owned companies. The European Commission has also adapted the conditions for the exit of the State from the recapitalisation of enterprises where it was a shareholder. The amendment allows the State to exit from the equity of such companies through an independent valuation, whilst restoring its previous shareholding and maintaining the safeguards to preserve effective competition in the Single Market.
Finally, taking into account the continued general lack of sufficient private capacity to cover all economically justifiable risks for exports to countries from the list of marketable risk countries, the amendment provides for an extension until 30 June 2021 of the temporary removal of all countries from the list of “marketable risk” countries under the Short-term export-credit insurance Communication.
Link to the 4th amendment of the text: https://bit.ly/3jQjKDY (Original version in French by Lionel Changeur)