Category: State aid

Airlines Serving Sardinia Challenged the European Commission’s Decision Declaring Illegal State Aid … And They Lost

On May 13, 2020, the General Court of the European Union (“Court”) dismissed the actions brought by airlines easyJet, Volotea and Germanwings, who sought the annulment of the European Commission’s (“Commission”) decision declaring illegal the aid granted by Italy to airlines serving Sardinia. The Court dismissed the airlines’ arguments relating to the absence of distortion of competition and of effect on trade between Member States.  In that regard, the Court explained that a national measure can be declared as State aid if such an aid is liable to affect trade and distort competition, without the necessity of establishing that such […]

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19 May, 2020
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Requests to Change the Temporary Framework Have Just Arrived

Not so long ago, a trade association that represents private equity funds and the world’s largest association of private capital providers, Invest Europe (link), asked the European Commission (“Commission“) to make some tweaks.  Namely, Invest Europe requested that Commission make changes to eligibility criteria for companies that wish to receive aid so as to avoid the exclusion of private equity-backed undertakings.  More precisely, their wish was for the Commission to change how it defines “undertakings in difficulty” in its Temporary Framework so that only certain criteria instead of an entire definition apply to private equity-backed undertakings.  Just a reminder, the […]

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11 May, 2020
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The new Government Decree postponed the most important deadlines for business entities

The legal framework of economic support measures established on April 10, 2020 through a series of decrees, was followed less than a week later by another decree.  Namely, the Government of the Republic of Serbia adopted the Decree moving the deadlines for holding the regular session of the general meeting and submitting annual and consolidated financial statements for companies, cooperatives, other legal entities and entrepreneurs, as well as deadlines for submitting corporate income tax returns and self-employment income tax returns, validity of authorized auditor licenses and real estate appraiser licenses which expire during the state of emergency declared because of […]

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30 Apr, 2020
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Last day for applying for Fiscal Benefits and Direct Grants

On 10 April 2020, the Government of the Republic of Serbia adopted Decree on Fiscal Benefits and Direct Grants to Private Sector Companies („Decree“) that entered into force the same day. The Decree foresees numerous benefits for private sector companies comprising direct grants along with deferred payment deadlines of certain public revenues. If they meet the requirements laid down in the Decree, all business entities in the private sector can be beneficiaries of aid by filing a tax return.   Although the Decree has comprehensively clarified all aspects of the use of State aid, several questions have arisen in practice […]

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28 Apr, 2020
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Development Fund loan repayment moratorium

Since the declaration of the state of emergency in Serbia, authorities have introduced scores of measures aimed at easing the financial pressure on both the economy and the public by the COVID-19 pandemic. To that end, the Government issued several decrees on fiscal benefits and financial support schemes, the National Bank of Serbia introduced a moratorium on repayment of bank loans and financial leasing instruments. Neither did Serbia’s Development Fund pass up the chance to contribute to the maintenance of commercial liquidity and financial stability. How so?   The loan repayment moratorium approved by the Development Fund   In line […]

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16 Apr, 2020
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The Government of Serbia has answered to questions concerning fiscal benefits and direct payments to business entities

The legal framework for economic support measures was established on 10 April 2020 by adopting a number of regulations of the Government of the Republic of Serbia (“Government“). Within a week of their publication, however, the number of business owners’ concerns is growing. One of them is the Decree on Fiscal Benefits and Direct Benefits to Private Sector Companies and Financial Assistance to Citizens to Mitigate the Economic Consequences of COVID-19 (“Decree“), which addresses fiscal policy measures, including specifying the rules for grants made from the budget of the Republic of Serbia, VAT treatment of the sale of goods and […]

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Keeping the European Businesses Liquid

The European Commission (“Commission”) published a statement on March 27, 2020 (available here), wherein it proposed an extension of State aid Temporary Framework (“Temporary Framework” – available here) that was adopted on March 19, 2020 with the aim of supporting European economies in the context of the COVID-19 outbreak.  On a similar note, the changes introduced by the new State aid Temporary Framework were addressed in one of our recent articles (available here). The Commission’s Vice-President Margrethe Vestager has emphasized the importance of coordinated action and in that sense called for Member States to provide support for companies in these […]

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01 Apr, 2020
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Essential industries and key business during the COVID-19 outbreak

 The outbreak of the COVID-19 virus has now spread to more than 200 countries all over the world and harsh measures taken to combat this even harsher nemesis are now leaving their mark on the economic sector. Many countries have opted to close all non-vital industries and sectors due to concern that workers that cannot switch to remote working are at increased risk of catching the coronavirus. This gave rise to two major issues. Firstly, those still working constantly run the risk of infection and reduction in their numbers, while those not working are at risk of running out of […]

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01 Apr, 2020
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Freezing subsidies – a possible blow to the renewable energy sector in Serbia?

With the state of emergency declared on March 15, 2020 and the discernible impact of the COVID-19 pandemic on Serbian industry, the authorities are trying to navigate the crisis as best as they can to help the Serbian economy survive.  The key to this effort is preserving the stability of public finances, which may be done by revoking earlier incentives given to certain industry branches. For instance, the authorities might decide to discontinue subsidies offered to privileged electricity producers in order to preserve the economy.  But what would be the consequences of such measures?   Subsidies in the energy sector […]

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Serbia Unleashes Unprecedented EUR 5.1 Billion Aid Package

On March 31, 2020, the Serbian Government adopted a €5.1 billion program of support measures for the economy (the Serbian Program).  According to the Minister of Finance, Siniša Mali, who announced the measures earlier in the day “[the Serbian Program] is equivalent to half of the State budget and 11% of national GDP”. What makes it a legal rarity is that this is a precedent of ‘Covid-19 EU Association State aid’.  In other words, this is the first case of Covid-19 related measures and aid being introduced in an EU association country based on Article 107(b) and (c) of the […]

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The EC Never Rests: Here Comes the Notification Template

After adopting the Communication on the Temporary Framework for State aid measures to support the economy during the current COVID-19 outbreak (“TF”) (available here), the European Commission (“EC”) published the Notification Template (available here) on March 24, 2020, and invited Member States to provide their notifications.   Notification of each Member State shall, first of all, include general information i.e. description of the serious disturbance in the economy and the official reaction of its authorities.  By requiring this information and data, the EC aims to clarify specificities of the current situation in each country.  Countries shall also provide a general […]

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The EU Approves Six New Support Schemes under the New Temporary Framework

The European Commission (“Commission”) promptly approved six new State aid schemes under the Temporary Legal Framework  in order to support companies affected by this unprecedented situation caused by COVID-19 outbreak. In these circumstances, Margarete Vestager, Executive Vice-President in charge of Competition policy in the EU Commission, emphasized: “The economic impact of the Coronavirus outbreak is severe. Together with the Member States, we are working to manage this impact as much as we can. And we need to act in a coordinated manner, to help Europe’s economy weather this storm and bounce back strongly afterwards. “   United Kingdom The UK announced two […]

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EU Approves German State Aid Package under the New Temporary Framework

The European Commission (“Commission”) approved the second State Aid Measure under the New Temporary Framework, as a response to the COVID-19 outbreak.  COVID-19 crisis is delivering a “major shock” to EU economies and, as Von der Layen previously promised, the Commission will give a leg up to the Member States to weather the storm.  In that regard, on March 22, 2020, the Commission promptly cleared, within 48 hours of the application being submitted, a State aid package by German Government, implemented through the German promotional bank Kreditanstalt für Wiederaufbau (“KfW”). Not to be found wanting, the German government has gone […]

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EU Approves French Support Schemes under the New Temporary Framework

Having adopted the Temporary Legal Framework to support the economy in the current COVID-19 outbreak, the European Commission has cleared the first State aid schemes under the Framework. France was first to receive approval for three schemes notified under the Temporary Framework.  “These [State aid schemes] are expected to mobilise €300 billion of liquidity support for companies affected by this unprecedented situation”, said Executive Vice President in charge of competition policy Margrethe Vestager. Envisaged as a tool to ensure liquidity, the aid will be available under favorable conditions and limited to those who need it most in the current circumstances.  Covering guarantees […]

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EU Introduces State Aid Lex Specialis: Direct Applicability to EU Association Countries?

Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak adopted with immediate effect (available here). Earlier this evening, March 19, 2020, the European Commission adopted special State aid legislation, in the word of EU’s competition head, Margrethe Vestager, with the aim “to act fast to manage the [COVID 19 economic] impact as much as we can”, which “enables Member States to use the full flexibility foreseen under State aid rules to support the economy at this difficult time” [emphasis added] (video available here). The new Temporary Framework is based on Article 107(3)(b) of the Treaty on […]

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Applying for State Aid in the Time of the COVID-19 pandemic

There are no two ways about it – the COVID-19 pandemic has an enormous impact on the way businesses apply for State aid. In that regard, and as a part of the overall response to the negative economic effects of the outbreak, the European Commission (“Commission”) issued the Notification under Article 107(2)(b) TFEU (“Notification”). Fresh out of the Commission’s headquarters, the Notification provides detailed information on the content of State aid notifications under Article 107 (2) b to the Treaty on the Functioning of the European Union (“TFEU”). The article in question enables Member States to provide aid for companies affected by […]

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COVID-19: Compare multiple jurisdictions across the globe with TerraLex

We are pleased to share the TerraLex Coronavirus Business Response Resource Center with you. It is a compilation of business solution resources from TerraLex members, some of the finest and best ranked firms, from around the globe relevant to contracts, labor, business continuity, etc. TerraLex and its members understand that in the rapidly evolving challenges posed by coronavirus and the prospect of recessionary times ahead, businesses are struggling with a variety of issues and looking to their trusted advisors for help. This Resource Center functions just like our cross-border guides. Visitors can select specific topics of interest and specific jurisdictions […]

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Addressing the Economic Impact of the COVID-19 Outbreak: State aid Measures

Addressing the Economic Impact of the COVID-19 Outbreak: State aid Measures Not only is the outbreak of COVID-19 in Europe an unprecedented health emergency, but it is also being greeted with widespread consternation by the global and European economy. Weathering the storm at global, European and national level requires a coordinated policy response that should support citizens, companies and economies. On March 13, 2020, the European Commission (“Commission”) set out a European coordinated response to counter the economic impact of the COVID-19 outbreak.  The response includes a set of measures pertaining to State aid framework, fiscal policy, health policy etc. […]

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