ANNOUNCEMENT 15 Oct 2021

In October 2021, the European Commission approved a French scheme to compensate certain retailers and services providers for the losses incurred in the lockdown periods given the COVID-19 pandemic. 

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

European Commission. Press release. “State aid: Commission approves €700 million French scheme for certain retailers and services affected by the coronavirus pandemic”. 15/10/2021. Available at: https://ec.europa.eu/commission/presscorner/detail/en/ip_21_5261

SA.62625 COVID 19 - Régime d’aides destinées à compenser les loyers et charges locatives des commerces de détail et de certains services interdits d’accueil du public en raison de la crise covid-19. Available at: https://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_62625

European Commission’s Decision. Objet: Aide d’État SA.62625 (2021/N) – France. COVID 19 - Compensation des loyers et charges locatives des commerces de détail et de certains ervices interdits d’accueil du public en raison de la crise COVID-19. 15/10/2021. Available at: https://ec.europa.eu/competition/state_aid/cases1/202144/SA_62625_0073B67C-0000-CE60-A662-BCF2CCA4977F_33_1.pdf

Inception date: 15 Oct 2021 | Removal date: 31 Dec 2021

Financial grant

On 15 October 2021, the European Commission approved a EUR 700 million (approx. USD 811.6 million) French compensation scheme to support certain retailers and services providers in the context of the COVID-19 pandemic. The scheme provides support in the form of financial grants to compensate for the rents paid during the lockdown period of 1 February 2021 until 31 May 2021. Support can be granted until 31 December 2021.

In particular, the scheme is open to certain retail outlets (furniture, clothing, IT, sports goods, opticians, jewellers) and some services (repair of personal and household goods, hairdressing and beauty care). The scheme is open to enterprises of all sizes. 

In this context, Margrethe Vestager, the Executive Vice-President, stated: “Closures to limit the spread of the pandemic have resulted in very significant losses in turnover for some retailers and services. This EUR 700 million scheme will allow France to partially compensate those companies for the losses incurred”.

In this context, the European Commission’s Decision highlighted: “The measure risks distorting competition as it reinforces the situation financial support of the beneficiary companies. It may also affect the exchanges between Member States since the beneficiary companies are either may be active in other Member States and are active in sectors open to competition and investment from other Member States”.

Regardless, the Commission approved the state aid without raising objections, concluding that the scheme “is compatible with the internal market pursuant to Article 107(2)(b) of the Treaty on the Functioning of the European Union".

The state aid is approved under the Temporary Framework under the State Aid and its amendments of 2 April 2020, 13 October 2020 and 1 February 2021. The European Commission adopted the Temporary Framework under the State Aid rules of the European Union on 19 March 2020 (see related state act).

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