State aid: Commission approves €642 million German federal “umbrella” scheme to compensate companies active in trade fairs and congress sector for damage suffered due to coronavirus outbreak

The European Commission has approved, under EU State aid rules, a €642 million German federal umbrella scheme to compensate companies active in the trade fairs and congress sector for damages suffered due to the coronavirus outbreak and the specific restrictive measures put in place by the government to limit the spread of the virus. The scheme will be open to owners and operators of fairs and congress infrastructure in Germany, as well as intermediary companies that lease trade fairs and congress infrastructure from the owner to third parties, and to those third parties leasing it. Companies will be eligible if they have incurred a loss of profit between 1 March and 31 December 2020 and if this loss is linked to measures put in place by the Länder to limit the spread of the virus, applicable in that period. The scheme covers up to 100% of the loss of profit directly resulting either from an administrative prohibition either of all events or, at least, of all large events (defined by reference to number of attendees). In general, the damage will be calculated as the difference between the average operating profits in the reference period (from 1 March to 31 December) in 2018 and 2019, and the actual profits in the same period in 2020. A beneficiary cannot claim compensation in relation to periods when, in the Land concerned, there were no prohibitions on trade fairs and congresses. In case of restrictive measures affecting only large events (which could thus still take place, but with a cap on attendees), losses that may result from lower attendance than still allowed (e.g. due to general reluctance of people to attend such events) cannot be compensated since they are not linked to governmental measures. The scheme includes a claw-back mechanism, whereby any possible public support in excess of the actual damage received by the beneficiaries will have to be paid back to the relevant granting public authority. The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union, which enables the Commission to approve State aid measures granted by Member States to compensate specific companies or specific sectors for the damages caused by exceptional occurrences, such as the coronavirus outbreak. The Commission found that the German 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 damages. 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.59173 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.