European Commission extends & expands key business relief measures
New rules allow for additional time to secure aid and COVID-19 relief provisions
Businesses in Europe received positive news when the European Commission (Commission) extended key support and relief provisions. Established in response to the COVID-19 pandemic and resulting economic crisis, the Temporary Framework allowed expanded flexibility for member states to deliver State aid to businesses, including de minimis grants of up to €800,000.
Initially set to expire on 31 December 2020, the expanded flexibility and grant authority has been extended until 30 June 2021. Additional recapitalisation measures were extended until 30 September 2021.
The Commission also introduced a new aid measure for companies facing a decline in turnover due to the outbreak. If a business has experienced a decline in turnover of at least 30% compared to the same period in 2019, member states may provide support for the fixed costs of the business not covered by revenues, up to €3 million.
Further, the Commission also revised guidelines to allow a member state to exit from the recapitalisation of enterprises from previously state-owned businesses, along with extending the temporary removal of a “marketable risk” list of countries under the Short-term export-credit insurance Communication.
Below are several key tenets and relief provisions of Europe’s Temporary Framework:
- Direct grants, selective tax advantages: grants up to €800,000 to address its urgent liquidity needs
- Deferral of tax payments and/or suspensions of social security contributions: for sectors, regions and companies hit hardest by the outbreak
- Targeted support in the form of wage subsidies for employees: contributions towards wage costs of companies in sectors or regions hit hardest by the outbreak
- State loan guarantees: to ensure loans reach customers who need them
- Subsidised public loans to companies: with favourable interest rates for working capital and investment
- Short-term export credit insurance: additional flexibility on short-term export credit insurance
- Safeguards for banks channeling State Aid to the real economy: where Member States supplement lending capacities of banks, this will not be considered as direct aid to banks
- Support for coronavirus R&D: aid for coronavirus and antiviral R&D; bonuses for cross-border cooperation
- Support for construction and upscaling of testing facilities: aid for construction or upscaling infrastructure to develop and test products to tackle the coronavirus (up to first industrial deployment)
- Support for products to tackle coronavirus outbreak: aid for rapid production of coronavirus-relevant products
Want to learn more and check to see if your business is eligible? Connect with an expert today!