Member Article

The new measures adopted by the European Commission Last Friday, the European Commission (“Commission”) has adopted an amendment to existing State aid rules to widen the perimeter of the national measures which can be authorized based on the exceptional legal framework to cope with the current crisis.

a. In particular, the Commission considered the following measures:a. More support for research and development related to the current health crisis. The new rules allow aid, in the form of direct grants, repayable advances or tax advantages for coronavirus and other relevant antiviral R&D, also beyond the ordinarily applicable rules set out in the 2014 Commission’s Communication on State aid for R&D&I.

b. More support for the construction and upscaling of testing facilities needed to develop and test products useful to tackle the coronavirus outbreak, such as medicinal products (including vaccines) and treatments, medical devices and equipment (including ventilators and protective clothing, as well as diagnostic tools), disinfectants, data collection and processing tools useful to fight the spread of the virus. Member States can grant aid in the form of direct grants, tax advantages, repayable advances and no-loss guarantees.

c. More support for the manufacturing of products relevant to tackle the coronavirus outbreak and the rapid production of coronavirus-relevant products: Member States can grant aid in the form of direct grants, tax advantages, repayable advances and no-loss guarantees.

d. Targeted support in the form of deferral of tax payments and/or suspensions of social security contributions, to further reduce the liquidity constraints on companies due to the coronavirus crisis and to preserve employment, in those sectors, regions or for types of companies that are hit the hardest by the outbreak.

e. Targeted support in the form of wage subsidies for employees, to help limit the impact of the coronavirus crisis on workers, in sectors or regions that have suffered most from the coronavirus outbreak, and would otherwise have had to lay off personnel. f. Further support to address urgent liquidity needs of companies, enabling Member States to give zero-interest loans, guarantees on loans covering 100% of the risk, or provide equity up to the nominal value of Euro 800 000 per company. This can be combined also with so-called de minimis aid and with other types of aid.

Read the complete report here.