ANNOUNCEMENT 26 May 2020

On 26 May 2020, the European Commission approved a EUR 500 million state aid scheme introduced by Lithuania as a result of COVID-19. 

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

SA.57008. COVID-19 - Aid Fund for Business :
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_57008

Original publication:
http://eur-lex.europa.eu/JOHtml.do?uri=OJ:C:2020:228:SOM:EN:HTML

European Commission decision. SA.57008
https://ec.europa.eu/competition/state_aid/cases1/202024/285510_2163226_98_2.pdf

European Commission. Press release of 26 May 2020.
/rapid/pressReleasesAction.do?reference=IP/20/943

Inception date: 26 May 2020 | Removal date: 30 Jun 2021

State loan

On 26 May 2020, the European Commission approved a EUR 500 (USD 625) million state aid scheme that provides financial support in the form of state loans, among others, from Lithuania. The aid will support nearly all medium and large enterprises. The scheme is in force until 30 June 2021.

The objective of the state loan scheme is to assist those industries most affected by the COVID-19 pandemic. However, ineligible entities include industries: "manufactur[ing]weapons and ammunition, tobacco and tobacco products, manufacture, processing and retail sale in specialised stores of distilled alcoholic beverages and related products (excluding manufacture of non-distilled alcoholic beverages), gambling and betting activities, provision of financial services and insurance activities." In this sense, a single loan will be between EUR 300,000 and EUR 2 million (more than USD 329,000 and USD 2.1 million).

In this context, the European Commission noted the: "The Measures are liable to distort competition since they strengthen the competitive position of its beneficiaries. The Measures also affect trade between Member States, since those beneficiaries may be active in sectors in which intraUnion trade exists."

Regardless, the Commission has decided not to raise objections to the aid on the grounds that "it is compatible with the internal market under Article 107(3)(b) TFEU."

The state aid is notified under the following objective: Remedy for a serious disturbance in the economy.

This 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 2020, please see related state act.

Additionally, the European Commission approved other forms of equity on the same day as part of the same state aid scheme. Please, see related state interventions.

A state act in the GTA database is assessed solely in terms of the extent to which its implementation affects foreign commercial interests. On this metric, the financial support granted here is discriminatory.

AFFECTED SECTORS

 
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AFFECTED PRODUCTS

 
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Inception date: 26 May 2020 | Removal date: 30 Jun 2021

Capital injection and equity stakes (including bailouts)

On 26 May 2020, the European Commission approved a EUR 500 (USD 625) million state aid scheme that provides financial support in the form of capital injections, among others, from Lithuania. The aid will support nearly all medium and large enterprises. The scheme is in force until 30 June 2021.

The objective of the capital injection scheme is to assist those industries most affected by the COVID-19 pandemic. However, ineligible entities include industries: "manufactur[ing]weapons and ammunition, tobacco and tobacco products, manufacture, processing and retail sale in specialised stores of distilled alcoholic beverages and related products (excluding manufacture of non-distilled alcoholic beverages), gambling and betting activities, provision of financial services and insurance activities." The maximum amount for each beneficiary is EUR 250 (USD 274) million.

In this context, the European Commission noted the: "The Measures are liable to distort competition since they strengthen the competitive position of its beneficiaries. The Measures also affect trade between Member States, since those beneficiaries may be active in sectors in which intraUnion trade exists."

Regardless, the Commission has decided not to raise objections to the aid on the grounds that "it is compatible with the internal market under Article 107(3)(b) TFEU."

The state aid is notified under the following objective: Remedy for a serious disturbance in the economy.

This 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 2020, please see related state act.

Additionally, the European Commission approved a state loan scheme on the same day. Please, see related state interventions.

A state act in the GTA database is assessed solely in terms of the extent to which its implementation affects foreign commercial interests. On this metric, the financial support granted here is discriminatory.

 
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