CMS Expert Guide to state aid in the EU during coronavirus crisis

The Coronavirus (COVID-19) pandemic is having a significant economic impact around the world. In response to this, EU Member States have established (or are planning further) support measures for businesses. Some of these support measures may amount to State aid within the meaning of Article 107(1) TFEU, whilst other support measures may not formally meet this definition.

Support that does not amount to State aid (therefore being permissible under EU law) includes any measure that:

  • is available to all businesses in a Member State (i.e. not selective);
  • only grants support to small and local businesses (i.e. those incapable of affecting cross-border trade); or
  • does not provide an undue economic advantage as the business cannot get a better deal from the Member State than those offered by the market (the ‘Market Economy Operator Principle’).

Examples of measures that would not amount to State aid under EU law include:

  • short-term allowance schemes or deferral of public debts that are generally available to all companies;
  • financial support by municipalities to local restaurants or shop owners; or
  • any capital measures by Member States (e.g. the acquisition of shares or capital injection into companies), if it can be demonstrated that the measure complies with the Market Economy Operator Principle.

Generally, any other measure would need to comply with the EU State Aid rules and be approved by the EU Commission prior to its implementation.

In response to the COVID-19 pandemic, the EU Commission has adopted a Temporary Framework to give Member States more flexibility under State aid rules to support the economy. This Temporary Framework provides for various types of aid that can be granted by Member States in response to the economic impact of COVID-19. At this time, the Commission has approved more than 150 separate measures under the Temporary Framework.

The CMS EU State Aid Group has been assisting businesses and governments at an international and national level with navigating through the complexity of the new rules brought about to support the economy as quickly as possible. This expert guide outlines the state of play in each jurisdiction covered as well as the EU. It is updated regularly as new public support has been and will be put in place in various jurisdictions.

As always, we are very happy to receive your comments and questions. Please reach out to your local State Aid expert found on the CMS State Aid Contact Card.