Commission approves €9.5 million Swedish scheme to compensate passenger ferries for damages suffered due to the coronavirus outbreak

The European Commission has approved under EU State aid rules an approximately €9.5 million (SEK 100 million) Swedish scheme to compensate passenger ferry companies for damages suffered due to the coronavirus outbreak. Since mid-March 2020, the Swedish Ministry of Foreign Affairs has put in place travel restriction measure necessary to limit the spread of the virus. Borders with several neighbouring countries were closed, including Denmark, Finland, Poland, and Norway. All these events severely affected ferry companies having traffic to and from Sweden. These passenger ferry companies have been particularly affected by the outbreak as they were forced to reduce traffic, cancel lines and take vessels out of traffic, experiencing a dramatic decline in passenger numbers. In addition, all crew members of affected vessels have been placed on short-term lay-off. Under the scheme, the ferry companies will be entitled to compensation for damages incurred between 24 March and 31 July 2020, in the form of tax deductions on wage-related costs for seafarers. The compensation will cover the damages calculated as the difference between the lost revenues from the ships lying at quay and the savings in their variable costs for the period when they were prevented from operating, compared to the same period in 2019. Sweden will compensate damages only in relation to the period for which the travel restrictions and borders closures are still effectively in place, while ensuring that damages can no longer be considered to be incurred when the ferry companies can operate again (i.e. when borders are reopened and/or the strict travel restrictions are lifted). The Commission found that the scheme is in line with Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures granted by Member States to compensate specific companies or specific sectors for the damages directly caused by exceptional occurrences, such as the coronavirus outbreak. The Commission found that the Swedish scheme will compensate damages that are directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the envisaged compensation does not exceed what is necessary to make good the damage. The Commission therefore concluded that the scheme is in line with EU State aid rules. The non-confidential version of the decision will be made available under the case number SA.57710 in the State aid case register on the Commission’s competition website once any confidentiality issues have been resolved.