State aid: Commission approves Danish scheme to compensate companies for damages suffered due to coronavirus outbreak

The European Commission has approved, under EU State aid rules, a Danish scheme to compensate damages suffered by companies in the tourism and travel-related sectors, with a budget of approximately €47 million (DKK 350 million) per month. The scheme will be open to companies active in sectors that are still affected by border and travel related measures implemented by the Danish government to limit the spread of the coronavirus. This scheme follows a similar scheme approved by the Commission in July 2020, which covered the period between 9 July and 31 August 2020 (SA.57932). Under the new scheme, legal entities registered in the Danish Central Business Register (CVR), which have a documented decline in turnover of more than 35% because of the emergency measures taken to limit the spread of the virus, will be entitled to compensation for the damage they suffered in the period between 29 October 2020 and 20 April 2021. This damage is calculated compared to a reference period, which in principle is the same months the year before (or a period in 2019, in case the damage was suffered in the period as of March 2021). The aid will take the form of direct grants to partially or fully compensate the fixed costs that these companies continue to bear, with several levels of compensation according to the level of turnover decline. The maximum aid amount per company is approximately €4 million (DKK 30 million) per month. The Danish authorities will carry out ex-post checks to ensure that the compensation does not exceed the actual damage suffered. The public support in excess of the actual damage received by the beneficiaries will have to be paid back to the Danish State. 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 scheme will compensate damages that are directly linked to the coronavirus outbreak and the subsequent measures adopted by the Danish government. 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. 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.62226 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.