ANNOUNCEMENT 24 Nov 2020

In November 2020, the European Commission approved a financial grant scheme from Luxembourg to help companies particularly affected by restrictions to support uncovered costs.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

European Commission decision. State Aid SA.59322 – Luxembourg
https://ec.europa.eu/competition/state_aid/cases1/202048/289549_2213898_53_2.pdf

SA.59322 COVID-19 - Aid scheme for uncovered costs under the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak
https://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_59322

Update January 2021
SA.60541. Covid-19: Modification of scheme on uncovered fixed costs (SA.59322) :
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_60541

Original publication:
http://eur-lex.europa.eu/JOHtml.do?uri=OJ:C:2021:025:SOM:EN:HTML

European Commission decision. SA.60541
https://ec.europa.eu/competition/state_aid/cases1/20213/290892_2232105_52_2.pdf

Inception date: 24 Nov 2020 | Removal date: 26 Feb 2021

Financial grant

On 24 November 2020, the European Commission approved a EUR 120 (USD 131) million financial grant scheme from Luxembourg. The aid will support any undertaking particularly affected by governmental restrictions which qualify under certain conditions (for example: 'have turnover for the tax year 2019 of at least EUR 15 000'). Beneficiaries are all undertakings active in Luxembourg, with the exception of financial services. The scheme is in force until 31 May 2021.

Under the scheme, the Ministry of Economy will be in charge of administering the grant which will vary according to the size of the applicants (SMEs may receive up to EUR 100 000 while large companies may receive up to EUR 200 000).

In this context, the European Commission noted the: 'The measure is liable to distort competition, since it strengthens the competitive position of its beneficiaries. It also affects trade between Member States, since those beneficiaries are active in sectors in which intra-Union 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 pursuant to Article 107(3)(b) of the Treaty on the Functioning of the European Union.'.

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

The state aid is approved under the Temporary Framework under the State Aid and its amendments of 13 October 2020. The European Commission adopted the Temporary Framework under the State Aid rules of the European Union on 19 March (see related state act).

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.

Update

On 8 January 2021, the European Commission approved SA 60541 specifying the scheme is also open to retail stores.

On 26 February 2021, the European Commission approved SA 61934 extending and increasing the budget of the present scheme (see related state act). 

AFFECTED SECTORS

 
N/A

AFFECTED PRODUCTS

 
N/A