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 Temporary Framework requires that “the aid may be granted to undertakings that were not in difficulty on 31 December 2019”.

A recently as May 18, 2020, Allied for Startups (link), a network of over 40 advocacy organizations, called on the Commission in a letter signed by 15 associations across Europe, to ensure that emergency liquidity support granted as a result of the impact of the health crisis is not delayed or blocked by EU legislation, and in particular by the Temporary Framework.  Allied for Startups argued that an “undertaking in difficulty“ is intended to apply to loss-making businesses since December 31, 2019, while many startups are loss-making by design in their infancy. Hence, they have no access to much-needed support also in the form of State aid.

Only time will tell once the Commission sorts out these requests.