Amendments to the Temporary Framework for State Aid Measures
News    ·   08-04-2020
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AUTHOR: Ron Galea Cavallazzi; Lisa Abela; Kristina Azzopardi

On March 19, 2020, the European Commission (Commission) adopted a Communication on the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak (Temporary Framework).

On 4 April, 2020, the Commission adopted a Communication that amends the Temporary Framework which provides clarifications as well extends the Temporary Framework by providing for additional five types of aid measures also intended to support Member States in combatting the COVID-19 pandemic and preserving employment throughout the outbreak. These amendments were effective as of the 3 April, 2020.

The clarifications relate to those state aid measures under the Temporary Framework that may be cumulated with each other and the conditions surrounding the aid granted to undertakings that were not in difficulty on 31 December 2019.

With respect to the newly introduced measures which may be utilized by Member States, these include aid for research and development projects, as well as, investment aid for the construction or upgrade of testing and upscaling infrastructures related to COVID-19 and for the production of COVID-19 relevant products (such as hospital and medical equipment). Furthermore, the Commission introduced aid in the form of tax deferrals and suspensions of employer social security contributions, together with wage subsidies for employees to avoid employers reducing their personnel by suspending or terminating employments.

The Commission declared that the state aid measures may be assessed for compatibility under both Article 107(3)(b) and 107(3)(c) TFEU. It is clear that a number of conditions must be satisfied in order to ensure compatibility and to safeguard the measures from misappropriate or inadequate usage.

For more information on state aid support measures surrounding the COVID-19 outbreak or other related matters, kindly contact us on competition@camilleripreziosi.com.

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