On Thursday 18 November, the European Commission decided to extend the State aid Temporary Framework, which was set to expire on 31 December 2021, until 30 June 2022.
It also introduced two new measures to create direct incentives for forward-looking private investment and solvency support measures, for an additional limited period.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said that the limited prolongation “gives the opportunity for a progressive and coordinated phase-out of crisis measures, without creating cliff-edge effects, and reflects the projected strong recovery of the European economy overall”.
Vestager told MEPs that the Commission will continue to closely monitor the development of the Covid-19 pandemic and other risks to economic recovery.
In addition, the Commission has introduced a number of targeted adjustments, including two new tools to support the ongoing recovery of the European economy in a sustainable way:
- investment support measures. Member States may create incentives for investments undertaken by companies and use this tool to accelerate the green and digital transitions. The measure includes safeguards to avoid undue distortions to competition, such as the fact that they should target a wide group of beneficiaries and the aid amounts should be limited in size. This instrument is available to Member States until the end of 2022;
- solvency support measures to leverage private funds and make them available for investments in small and medium-sized enterprises (SMEs), including start-ups, and small midcaps. Member States may grant guarantees to private intermediaries, creating incentives to invest in these types of companies and provide them with easier access to such equity financing that is often difficult for them to attract individually. This instrument is available to Member States until 31 December 2023.
In addition, the Commission has: - prolonged from 30 June 2022 until 30 June 2023 the possibility for Member States to convert repayable instruments (e.g. guarantees, loans, repayable advances) granted under the Temporary Framework into other forms of aid, such as direct grants; - proportionally adapted to the extended duration the maximum amounts of certain types of aid; - clarified the use of the exceptional flexibility provisions of the Commission’s Rescue and Restructuring Guidelines; and - prolonged the adjusted list of non-marketable risk countries, in the context of the Short-Term Export-Credit Insurance (STEC), for an additional three months (from 31 December 2021 to 31 March 2022).
The State aid Temporary Framework dates from 19 March 2020 and has been amended several times (April, May and late June 2020). On 13 October 2020, the scheme was extended until 30 June 2021 (except for recapitalisation measures, which could be granted until 30 September 2021). On 28 January 2021, the Commission adopted a fifth amendment.
Link to changes: https://bit.ly/3qM6ab9 (Original version in French by Lionel Changeur)