August 04
2020
Dolores Utrilla
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25th March 2020
Competition & State Aid Covid-19

Commission approves German State aid schemes to support the economy in the COVID-19 outbreak

Yesterday, the European Commission decided to approve two State aid schemes notified by Germany aiming to support the German economy in the context of the coronavirus outbreak. The approved measures include:

  • Firstly, a scheme to support companies affected by the coronavirus outbreak through direct grants, repayable advance or tax and payment advantages. The scheme, called ‘Bundesregelung Kleinbeihilfen 2020’, aims to remedy the difficulties faced by companies and to ensure that the disruptions caused by the current crisis do not undermine their viability.
  • Secondly, an additional support measure for guarantees on loans for companies affected by the coronavirus outbreak, to be implemented through the German federal and regional authorities, as well as promotional and guarantee banks. This scheme, open to all companies, enables the granting of guarantees on loans at favourable terms to help businesses cover immediate working capital and investment needs. The objective of the measures is to provide companies with liquidity to help safeguard jobs and continue their activities in these difficult times.

Both schemes were approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020 to support the economy in the context of the COVID-19 outbreak.

The Commission concluded that the notified schemes will contribute to managing the economic impact of the coronavirus outbreak in Germany, and that they are necessary, appropriate, and proportionate to remedy a serious disturbance in the economy of a Member State, in accordance with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. Concerning this Framework, the Commission noted in particular:

  • As regards the direct grant scheme, the fact that the aid does not exceed 120,000 euros per company active in the fishery and aquaculture sector; 100,000 euro per company active in the primary production of agricultural products; 800,000 euros for all other companies affected by the coronavirus outbreak.
  • As regards the loan guarantee scheme, it noted the facts that: the underlying loan amount per company is linked to cover its liquidity needs for the foreseeable future; the guarantees will only be provided until the end of this year; the guarantees are limited to a maximum six-year duration; and that companies pay guarantee premiums as set out in the Temporary Framework.

The non-confidential version of the decisions has yet to be published in the State aid register of the Commission’s competition website under the case numbers SA.56790 (for the direct grant scheme) and SA.56787 (for the loan guarantee scheme).

Read the Commission’s press releases here and here.

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