State aid: Commission approves a €900 million Swedish compensation scheme for the damages suffered due to the coronavirus outbreak

The European Commission has approved a SEK 9.1 billion (approximately €900 million) scheme to compensate damages suffered by companies due to the coronavirus outbreak. The aim of the scheme is to compensate companies for the damages they would suffer in case of business disruption due to the coronavirus outbreak and prohibition measures that the Swedish government may adopt until 30 September 2021 to limit the spread of the virus. If such prohibition measures are adopted, companies who suffered at least a 25% decline in their total net turnover in the compensation period compared to the same month in 2019 due to the measures will be eligible to receive aid. The public support will take the form of direct grants, with a maximum amount per beneficiary of SEK 40 million (approximately €4 million) for each period of one month where a restrictive measure applied. In order to ensure there is no overcompensation, it is envisaged that the fixed costs do not cover the totality of an undertakings’ fixed costs and a specific cap is foreseen for loss-making companies. The Commission assessed the scheme under 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. In particular, the Swedish aid scheme will compensate damages that are directly linked to the coronavirus outbreak and related prohibition measures. The Commission found that the measure is proportionate, as the foreseen compensation does not exceed what is necessary to make good the damage. On this basis, the Commission therefore concluded that the scheme is in line with EU State aid rules. More information on the actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.62406 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.