ANNOUNCEMENT 24 Mar 2020
In March 2020, the European Commission approved the German notified financial aid scheme to support local companies following the outbreak of COVID-19.
NUMBER OF INTERVENTIONS
Letter to the Member State - State Aid SA.56790 (2020/N) – DE – Federal Framework "Small amounts of aid 2020" (“Bundesregelung Kleinbeihilfen 2020”), issued on 24 March 2020: https://ec.europa.eu/competition/state_aid/cases1/202013/285205_2142884_55_2.pdf
EU Commission, press release of 24 March 2020, State aid: Commission approves German direct grant scheme to support companies affected by coronavirus outbreak: https://ec.europa.eu/commission/presscorner/detail/en/IP_20_524
SA.56790 Federal Framework "Small amounts of aid 2020" - COVID-19
On 24 March 2020, the EU Commission approved the German Bundesregelung Kleinbeihilfen 2020. The scheme was introduced following the outbreak of COVID-19 and is in force until 31 December 2020. The maximum total budget value is EUR 45 billion (approx. USD 48.6 billion).
Whilst Bundesregelung Kleinbeihilfen 2020 is a federal framework scheme, the aid is granted on a federal, regional and local level throughout Germany. Eligible beneficiaries are companies located in Germany, of all sizes and operating in any sector. However, financial institutions and companies which were not in financial difficulty before 31 December 2019 are not eligible. Under the scheme, beneficiaries are granted public support in various forms including as direct grants. Other public support measures can be granted through repayable advances and tax relief advantages.
The German authorities clarified that the financial support package was introduced to remedy the economic effects following the COVID-19 outbreak. In this context, it was noted that: "The COVID-19 outbreak is a serious challenge for German citizens but also companies. Notably, due to the economy’s close international ties, German companies are affected by the impact of the pandemic. Cancellations of trade fairs and large-scale events, and the decline in travel, are affecting the service sector, especially in the areas of logistics, trade, gastronomy and tourism. At the same time, foreign demand is dropping and international supply chains are being disrupted, which affects production in Germany."
The EU Commission noted that: "The measure conveys an advantage by making available financing which would not
be available to the beneficiaries without the measure. The measure is selective since only undertakings affected by the Covid-19 outbreak and selected for the scheme will benefit from it. The selection of the beneficiaries will be up to the granting authorities at Federal, regional and local level. As the scheme covers sectors and undertakings involved in trade between Member States, there is a risk that the aid could affect such trade."
The Commission approved the state aid noting that: "... the Commission considers that the notified measure is in conformity with the TF COVID-19 (ed. Temporary Framework under the State Aid). It has accordingly decided not to raise objections to the aid on the grounds that it is compatible with the internal market pursuant to Article 107(3)(b) TFEU. ."
The state aid is approved under the Temporary Framework under the State Aid. The European Commission adopted the Temporary Framework under the State Aid rules of the European Union on 19 March, see related state act.
On 24 March 2020, the German Bundesregelung Kleinbeihilfen 2020 was introduced following the EU Commission's approval on the same day. The maximum total budget value is EUR 45 billion (approx. USD 48.6 billion).
Eligible beneficiaries are companies located in Germany, of all sizes and operating in any sector. However, financial institutions and companies which were not in financial difficulty before 31 December 2019 are not eligible. Under the scheme, beneficiaries are granted public support in various forms including as certain favourable tax or payment advantages. Other public support measures can be granted through repayable advances and financial grants.
The scheme was is in force until 31 December 2020.