European Union: COVID-19 Key EU Developments, Policy & Regulatory Update No. 85

COMPETITION & STATE AID

State Aid

European Commission approves new and amended Member State measures to support the economy (see here and here)

Since the onset of the coronavirus outbreak, the Commission has adopted a significant number of State aid measures under Article 107(2)b, Article 107(3)b and under the Temporary Framework.

The Temporary Framework, adopted in March 2020, is currently applicable until 30 June 2022.

• €223 million Flemish scheme to support companies and public entities in the context of the coronavirus pandemic and Brexit
• €45.4 million Croatian scheme to support the civil aviation sector affected by the coronavirus pandemic
• €9.5 million Italian scheme to preserve employment levels in the context of the coronavirus pandemic
• €677 million Italian investment support scheme towards a sustainable recovery in the context of the coronavirus pandemic
• Re-introduction of Swedish scheme, including €2.55 million budget increase, to support air traffic control services affected by the coronavirus pandemic
• €300 million Romanian scheme to support agri-food entities in the context of the coronavirus pandemic
• €33.4 million Latvian measure to recapitalize airBaltic in the context of the coronavirus pandemic
• €11.6 million Latvian aid measure to compensate airBaltic for the damage suffered due to the coronavirus pandemic
• €8 million Portuguese scheme to support companies in Azores in the context of the coronavirus pandemic
• €890,000 Cypriot scheme to support cheesemakers in the context of the coronavirus pandemic
• Re-introduction of a Slovenian scheme, including €150 million budget increase, to support companies affected by the coronavirus pandemic and the development of coronavirus-relevant products

European Commission approves further schemes under State aid Temporary Crisis Framework in context of Russia's invasion of Ukraine (see here)

To recall, in adopting this Crisis Framework, the Commission noted that the conflict had significantly impacted the energy market, and steep rises in energy prices had affected various economic sectors, including some of those particularly affected by the COVID-19 pandemic, such as transport and tourism. The conflict also disrupted supply chains for both EU imports from Ukraine (in particular, cereals and vegetable oils) and EU exports to Ukraine.

The latest schemes under the Crisis Framework include:

• €500 million Luxembourgish loan guarantee scheme to provide liquidity support to companies of all sizes and sectors active in Luxembourg, with the exception of the financial sector, in the context of Russia's invasion of Ukraine
• €16 million Finnish scheme to support farmers in context of Russia's invasion of Ukraine
• €30 million Maltese scheme to support the importation, manufacturing and wholesale of grains in context of Russia's invasion of Ukraine
• €1.2 billion Italian scheme to support agricultural, forestry, fishery and aquaculture sectors in context of Russia's invasion of Ukraine
• €25 million French aid scheme to support companies in the fishing sector in the context of Russia's invasion of Ukraine

Notably, the Crisis Framework complements the various possibilities for Member States to design measures in line with existing EU State aid rules. For instance, State aid measures under the Crisis Framework may be cumulated with aid granted under the COVID-19 Temporary Framework (see Jones Day COVID-19 Update No. 68 of 22 November 2021), provided that their respective cumulation rules are respected.

The Crisis Framework, applicable since 1 February 2022, will be in place until 31 December 2022. During its period of application, the Commission will keep the Framework under review in light of developments regarding the energy markets, other input markets, and the general economic situation. Prior to the Crisis Framework's end date, and in view of maintaining legal certainty, the Commission will assess whether it should be prolonged.