ANNOUNCEMENT 09 Jul 2021
In July 2021, the European Commission approved the establishment of the German Travel Insolvency Fund to support companies in the context of the COVID-19 pandemic.
NUMBER OF INTERVENTIONS
European Commission, Letter to the Member State on 9 July 2021, State Aid SA.63063 (2021/N) – Germany, COVID-19: German Travel Insolvency Fund :
European Commission, SA.63063 COVID-19: German Travel Insolvency Fund: https://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_63063
On 9 July 2021, the European Commission approved Germany's guarantee scheme for future loans taken out by the Travel Insolvency Fund. The scheme provides state guarantees on loans to support travel enterprises affected by the COVID-19 pandemic. Germany has indicated a maximum target capital of EUR 750 million (approx. USD 889.4 million). The aid in form of guarantees will be granted for loans which the Fund will take out latest until 31 October 2027.
The approved guarantee supports the Travel Insolvency Fund providing security for refund claims made by customers of package travel services in the case of an insolvency of a package travel organiser. The background is that package travel organisers are obliged to provide security for the case of insolvency. German enterprises of all sizes offering package travel are eligible to participate in the Fund, however, organisers with revenue above EUR 10 million (approx. USD 11.9 million) are obliged to participate.
The scheme aims at providing security for the refund of all payments made by customers of package travel services. Additionally, it should help to maintain liquidity in the market.
In its decision, the European Commission stressed that the guarantee scheme "strengthens the competitive position of its beneficiaries" and it "also affects trade between Member States" since those beneficiaries "are active in sectors in which intra-Union trade exists".
The European Commission approved the state aid without raising objections, concluding that the measure is compatible with the internal market according to Article 107(3)(b) of the TFEU.
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.