Commission sends to Member States draft proposal for a State aid Temporary Framework to support the economy in the context of the COVID-19 outbreak

Last night, the European Commission has sent to Member States for consultation a draft proposal for a State aid Temporary Framework to support the economy in the context of the COVID-19 outbreak, based on Article 107(3)(b) TFEU to remedy a serious disturbance across the EU economy. Executive Vice-President Margrethe Vestager said: “Managing the economic impact of the COVID-19 outbreak requires decisive action. We need to act fast. We need to act in a coordinated manner. EU State aid rules provide a toolbox for Member States to take swift and effective action. […] Our aim is to have the new Temporary Framework in place in the next few days. (…) The new Temporary Framework will enable Member States to (i) set up schemes direct grants (or tax advantages) up to €500,000 to a company, (ii) give subsidised State guarantees on bank loans, (iii) enable public and private loans with subsidised interest rates. Finally (iv), the new Temporary Framework will recognise the important role of the banking sector to deal with the economic effects of the COVID-19 outbreak, namely to channel aid to final customers, in particular small and medium-sized enterprises. The Temporary Framework makes clear that such aid is direct aid to the banks’ customers, not to the banks themselves. And it gives guidance on how to minimise any undue residual aid to the banks in line with EU rules.” A full statement is available online.