The European Commission will extend the temporary suspension of state aid rules until 31 December. It also increases the maximum amounts that member states are allowed to support companies with impunity in connection with the COVID disease and allows certain loans to be converted into grants.
EU Commissioner Margrethe Vestager: ‘the outbreak of the coronavirus lasts longer than we had hoped. We must continue to ensure that the member states can provide their businesses with the necessary support to get through.” The current lenient scheme would end on 30 June, except for recapitalisation, which would end on 30 September.
For companies seriously affected by the crisis, with a turnover loss of at least 30% compared to the same period in 2019, the fixed cost compensation ceiling is going up from EUR 3 million to EUR 10 million per company. The current aid that companies can receive from direct subsidies or tax benefits is more than doubled. For most sectors, this means an increase from EUR 800 000 to EUR 1.8 million for authorised state aid. The ceilings are lower only for agricultural and fish farms.
In addition, member states may convert previous loans and other forms of repayable aid into direct grants until the end of 2022 if they so wish. A maximum of EUR 225,000 will apply to agricultural holdings, EUR 270,000 to fisheries and aquaculture and EUR 1.8 million to other sectors.
Already on 19 March 2020, the commission suspended certain state aid rules in relation to the pandemic in the hope of keeping companies in the EU alive and saving jobs.