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On 3 April, the Commission adopted an Amendment to extend the Temporary Framework for State aid measures to support the economy in the COVID-19 outbreak adopted on 19 March (covered in our previous alert: European Commission publishes its emergency COVID-19 State aid rules and rapidly approves ten State aid schemes). The Amendment provides for five new types of aid measures, increases the existing support that Member States can grant companies and allows for aid measures under the Temporary Framework and the Amendment to be combined with de minimis aid.
The new aid measures introduced by the Amendment include two types aimed at mitigating the impact of COVID-19 on the economic.
- Deferrals of payment of taxes and of social security contributions in sectors, regions or for types of companies that are hit the hardest by the outbreak.
- Support in the form of contributions to the wage costs for companies in sectors or regions that have suffered from the coronavirus outbreak, to avoid lay-offs during the COVID-19 outbreak.
Where such deferrals and contributions are of a general application and do not target certain undertakings, or the production of certain goods, they are not selective and do not constitute State aid.
In addition, the Amendment introduces three types of aid to support the work to control and tackle the pandemic.
- Aid for COVID-19 relevant research and development in the form of direct grants, repayable advances or tax advantages.
- investment aid for the construction or upgrade of testing and upscaling infrastructures required to develop, test and upscale, COVID-19 relevant products, up to first industrial deployment prior to mass production.
- Investment aid for the production of COVID-19 relevant products including medicinal products and treatments, active pharmaceutical ingredients and raw materials, medical devices and equipment and necessary raw materials.
Further, the Amendment extends the existing aid measures introduced by the Temporary Framework. Member States may now give up to EUR 800,000 per company in equity, zero-interest loans and guarantees on loans covering 100% of the risk. (For loans >EUR 800,000 the Member State can cover up to 90% of the risk.)
Lastly, and important, all aid measures in the Temporary Framework, including the measures introduced by the Amendment, may be cumulated with each other and with de minimis aid.
We have produced a comparison of the consolidated Temporary Framework, highlighting the changes that have been introduced. The original Temporary Framework can be found here on the European Commission website.
Louise Lundberg (White & Case, Associate, Brussels) contributed to the development of this publication.
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