Prolongation of State Aid Temporary Framework

10 February 2021: In view of the persistence and evolution of the coronavirus outbreak, the European Commission has decided to prolong the State aid Temporary Framework adopted on 19 March 2020 (see press release).

The amendment prolongs all measures set out in the Temporary Framework, including recapitalisation measures, until 31 December 2021:

• With regard to limited amounts of aid granted under the Temporary Framework, the previous ceilings per company are now effectively doubled.
• The Commission will also enable Member States to convert until 31 December 2022 repayable instruments (e.g. guarantees, loans, repayable advances) granted under the Temporary Framework into other forms of aid, such as direct grants, provided the conditions of the Temporary Framework are met.

Increased aid ceilings

Taking into account the continued economic uncertainty and prolonged government measures to limit economic activity in order to stop the spread of the virus, the amendment also increases the ceilings set out in the Temporary Framework for certain support measures:

• With regard to limited amounts of aid granted under the Temporary Framework, the previous ceilings per company are now effectively doubled (taking into account the availability of de minimis support). The new ceilings are €1.8 million per company active in all other sectors incl. aviation (previously €800,000). As before, these can be combined with de minimis aid of up to €200,000 per over a period of three financial years, subject to complying with the requirements of the relevant de minimis
• For companies especially hit by the coronavirus crisis, with turnover losses of at least 30% during the eligible period compared to the same period of 2019, the State can contribute to the part of the fixed costs of companies that are not covered by their revenues, in an amount up to €10 million per company (previously €3 million).

Conversion of repayable instruments into direct grants

The Commission will also enable member states to convert until 31 December 2022 repayable instruments (e.g. guarantees, loans, repayable advances) granted under the Temporary Framework into other forms of aid, such as direct grants, provided the conditions of the Temporary Framework are met. In principle, such conversion may not exceed the new ceilings for limited amounts of aid (€225,000 per company active in the primary production of agricultural products, €270,000 per company active in the fishery and aquaculture sector, and €1.8 million per company active in all other sectors). This aims to provide incentives for Member States to choose, in the first place, repayable instruments as a form of aid.

Extension of the temporary removal of all countries from the list of “marketable risk" countries under the short-term export-credit insurance Communication

Finally, taking into account the continued general lack of sufficient private capacity to cover all economically justifiable risks for exports to countries from the list of marketable risk countries, the amendment provides for an extension until 31 December 2021 (currently until 30 June 2021) of the temporary removal of all countries from the list of “marketable risk" countries under the Short-term export-credit insurance Communication.

Next steps:

The European Commission and the Member States will assess in the coming months how to move from 2022 from this temporary framework to possibly a sectorial based approach.