Commission Announces Extension of State Aid Temporary Framework

Following the adoption of the State Aid Temporary Framework (the “Framework”) on 19 March 2020, the Commission announced that a draft proposal to extend the Framework has been sent to the Member States for consultation. This draft proposal follows the number of State aid decisions that the Commission has taken in the light of the Framework and the current economic situation. The proposed extension will see additional support possibilities for the five types of aid measures outlined in the Framework, in that it will provide for:

• i. more support for COVID-19 related research and development;
• ii. more support for the construction and upgrading of testing facilities;
• iii. more support for the production of products relevant to tackle the COVID-19 outbreak;
• iv. targeted support in the form of deferral of tax payments and/or suspensions of employers’ social security contributions; and
• v. targeted support in the form of wage subsidies for employees.

The Commission has also temporarily removed all countries from the list of “marketable risk” countries, thereby enabling them to offer public short-term export credit insurance in the light of the increasing insufficiency of private insurance capacity for exports to all countries amid the current situation.

The Commission aims to put into practice the updated Framework this week. Watch this space for more information once the update is announced.