02 April 2020
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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 difficult times.  She has further underlined the necessity of providing support to all companies which develop, test and produce the essential products such as vaccines, medicines and protective equipment, as well as support to save jobs in sectors hit hardest by the outbreak.

With reference to Vestager’s statement, the Commission has sent a draft proposal to Member States in order to convey the consultations regarding the extension. Therefore, it is expected that Member States comments on the Commission’s draft proposal.  The sole purpose of adopting the Temporary Framework was to ensure the liquidity of European businesses during these critical times.  Keeping this objective in mind, the Commission has approved 22 national measures to provide essential help to businesses across Europe.  In its statement, the Commission extends an extra pair of helping hands in the form of another five types of aid measures.

Now, moving on to the main part of the statement: the proposed measures.  The Commission has put the following five proposed measures to Member States:

  1. Support for coronavirus related research and development (R&D) – addressing the current health crisis;
  1. Support for the construction and upgrading of testing facilities – building new and upgrading the existing facilities which produce the relevant products, such as vaccines, medical equipment or devices, protective material and disinfectants;
  1. Support for the production of goods relevant to tackle coronavirus outbreak – production of vaccines, medical equipment or devices, protective material and disinfectants;
  1. Targeted support in the form of deferral of tax payments and/or suspensions of employers’ social security contributions – avoiding lay-offs due to the COVID-19 outbreak, in specific sectors most hit by the outbreak; and
  1. Targeted support in the form of wage subsidies for employees – avoiding lay-offs due to the COVID-19 outbreak in specific sectors that are hit the hardest by the outbreak.


Planning to intervene selectively on the basis of greatest need, the Commission’s main goal is to have the amended Temporary Framework in place as of next week.


For more information, please contact us via covid19@geciclaw.com.