State aid: Commission approves €200 million Slovak rent compensation scheme to support companies affected by coronavirus outbreak

The European Commission approved a €200 million Slovak scheme to support companies renting premises, which were limited or to carry out their activities due to the measures imposed by the Slovak government in the context of the coronavirus outbreak. These companies had to close business in the premises, interrupt teaching (in schools and school facilities) or exclude the presence of the public from the establishment due to the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April 2020 and 8 May 2020. The public support, which will take the form of direct grants, is intended to cover the reduction of the rent negotiated with the landlord, up to a maximum amount of 50% of the original rent., More specifically, if a tenant negotiates a rebate of 20% of the rent with the landlord, the State will pay to the landlord, on behalf of the tenant, another 20% of the rent, thereby reducing the rent by 40% for the tenant. This aims at mitigating the sudden liquidity shortages that the affected companies are facing due to the measures taken by the Slovak authorities to limit the spread of the coronavirus. The Commission found that the Slovak scheme is necessary, appropriate and proportionate to fight the health crisis, in line with Article 107(3)(b) TFEU, and the conditions set out in the Temporary Framework. In particular, (i) the support per company will not exceed the limits as set out in the Temporary Framework; and (ii) the scheme will run until 31 December 2020. On this basis, the Commission approved the measure under EU State aid rules. More information on the Temporary Framework and other 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.57599 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.