State aid actions

To further mitigate economic shocks and save businesses, the European Commission has put in place the most flexible State Aid rules yet, allowing Member States to provide direct support for hard hit companies and small firms as they may risk closing down without support. The Temporary Framework for State Aid measures, adopted on 19 March provides for five types of aid:

  1. direct grants (or tax advantages);
  2. subsidised state guarantees on bank loans;
  3. public and private loans with subsidised interest rates;
  4. existing lending capacities, and using them as a channel for support for businesses – in particular to small and medium enterprises. This aid is directed to  bank customers and not to the banks themselves;
  5. additional flexibility to enable short-term export credit insurance to be provided by the state where needed.

The aim of these measures is to ensure that businesses retain the means to keep operating, or to temporarily freeze their activity without implicating long-term growth prospects.

On 14 December, the Commission found the creation of a €25 billion Pan-European Guarantee Fund managed by the European Investment Bank to support companies affected by the coronavirus outbreak to be in line with EU state aid rules. On 17 August 2021, the Commission approved a new product in the form of guarantees on synthetic securitisation tranches, to support small and medium-sized companies affected by the coronavirus outbreak. With a dedicated budget of €1.4 billion, the new product aims to benefit businesses in 22 Member States and is expected to mobilise at least €13 billion of new lending to enterprises affected by the outbreak. The Fund is expected to mobilise up to €200 billion of additional financing to support mainly small and medium-size enterprises affected by the outbreak in the 21 participating Member States.

The Temporary framework was first amended on 3 April 2020 to increase possibilities for public support to research, testing and production of products relevant to fight the coronavirus outbreak, to protect jobs and to further support the economy. It was further amended on 8 May to enable recapitalisation and subordinated debt measures, and on 29 June 2020 to further support micro, small and start-up companies and to incentivise private investments. On 13 October 2020, the Commission adopted a fourth amendment to prolong the Temporary Framework and to enable aid covering part of the uncovered fixed costs of companies affected by the crisis.

On 28 January 2021, the Commission decided to prolong until 31 December 2021 the State aid Temporary Framework adopted in March 2020, to support the economy in the context of the coronavirus outbreak. The Commission also decided to expand the scope of the Temporary Framework by increasing the ceilings for certain support measures and allowing the conversion of certain repayable instruments into direct grants until the end of 2022 for Member States to make full use of the state aid rules flexibility to support their economies, while limiting distortions to competition.

In November 2021, the Commission extended the Temporary Framework until 30 June 2022, and introduced two new measures to create direct incentives for forward-looking private investment and solvency support measures, for an additional limited period. This allows Member States, where needed, to extend their support schemes and ensure that businesses still affected by the crisis will not be cut off suddenly from necessary support. At the same time, the Commission continues to monitor closely the developments of the COVID-19 pandemic and other risks to the economic recovery.

The Framework does not replace, but complements the many other possibilities already available to Member States in line with State aid rules. These are set out in the Communication on a coordinated economic response to the coronavirus outbreak of 13 March 2020.

On 11 February 2021, the Commission published an additional state aid guiding template to assist Member States in the design of the national recovery and resilience plans in line with the EU state aid rules, with respect to supporting the digitalisation of news media. This follows the publication of eleven state aid guiding templates in December 2020. Under the Recovery and Resilience Facility, each national plan must earmark a minimum 20% of expenditure to support the digital transition, in order to develop the viability of the digital news media and support its long-term development.

As Europe moves from crisis management to economic recovery, State aid control will also accompany and facilitate the implementation of the Recovery and Resilience Facility. In this context, the Commission will:

  • engage with Member States to ensure investment projects supported by the Recovery and Resilience Facility are compatible with State aid rules. Indeed, certain infrastructure investments and direct support to citizens, fall outside State aid rules altogether and many measures do not need to be notified since they fall under block exemptions;
  • provide guidance to Member States as regards the flagship investment projects, including by providing templates; and
  • push ahead with revising key state aid rules by the end of 2021 to accommodate the green and digital transitions.

The Commission approves through urgent procedures state aids cases 7 days a week. Further information can be found on the Commission’s State aid webpages: State aid in the context of the coronavirus pandemic

Supporting the public short-term export credit market

As enterprises are facing a severe lack of liquidity and their trading conditions are increasingly exposed to financial risks, private insurers are withdrawing from the short-term export-credit market. As a result, all economically justifiable risks for exports to all countries in the world, including all Member States can no longer be sufficiently covered. The European Commission therefore decided on 27 March to temporarily remove all countries from the list of “marketable risk" countries under the Short-term export-credit insurance Communication. This will make public short-term export credit insurance more widely available in light of the current crisis. The amendment further expands on the flexibility introduced by the Commission's State aid Temporary Framework with respect to the possibility by State insurers to provide insurance for short-term export-credit.

On 13 October, the Commission decided to extend until 30 June 2021 the temporary removal of all countries from the list of “marketable risk" countries under the Short-term export-credit insurance Communication.

Member States

Click on a country below to see the latest details of these measures.

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The Netherlands

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United Kingdom (until 31 December 2020)

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