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 separate aid schemes to support small and medium-sized enterprises (SMEs) active in all market sectors facing temporary financial difficulties due to the coronavirus outbreak.  The UK will set up the so-called “Coronavirus Business Interruption Loan Scheme” which will initially run until September 30, 2020, with the possibility for the UK to extend its operation until December 31, 2020.

It should be noted that according to the UK Withdrawal Agreement, during the transition period, the EU acquis continues to apply in UK, including the State aid rules, as in any other Member State.

Luxembourg

Luxembourg will support companies and liberal professions (self-employed lawyers, notaries, engineers, architects, doctors, dentists and accountants etc.) through a EUR 300 million scheme, to cover their operating costs and weather the crisis. This measure takes form of a repayable advance granted in one or more installments to allow beneficiaries to cover their operating costs.

 

Spain

Spanish self-employed workers and small and medium-sized enterprises will be supported to respond to the crisis through guarantee schemes on new loans and refinancing operations worth EUR 20 billion in total. The objective of these measures is to ensure that eligible companies have liquidity to help them protect jobs and continue their activities faced with the difficult situation caused by the coronavirus outbreak.

 

Latvia

A subsidized loan scheme and a loan guarantee scheme of EUR 250 million are supposed to ensure that Latvian companies can navigate the current situation. To ensures that support is swiftly available at favorable conditions and effectively channeled to the beneficiaries in need, measures include minimum remuneration and other safeguards.

 

Portugal

Portugal announced four guarantee schemes for small and medium-sized enterprises SMEs and midcaps affected by the outbreak, active in four different sectors: (i) tourism; (ii) restaurants (and other similar activities); (iii) extractive and manufacturing industry; and (iv) travel agencies, tourist services and event organization (and similar activities). These schemes have a total budget of EUR 3 billion.

 

Italy

These are very difficult times, especially in Italy. We have to do what we can to mitigate the impact of the Coronavirus outbreak on human lives and livelihoods “, Vestager said and added, these (measures) are needed urgently “.

Under such circumstances, the Commission approved the Italian aid scheme worth EUR 50 million to support production and supply of medical devices (such as ventilators) and personal protection equipment (such as masks, goggles, gowns, and protective suits). The scheme will help Italy provide the necessary medical treatment to those infected while protecting healthcare operators and citizens.

 

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