Any measure by EU member states granting a selective financial advantage to one or more companies and capable to distort competition is considered state aid. State aid needs prior notification and approval by the European Commission (EC). Similar rules apply in relation to Norway, Iceland and Lichtenstein. Rationale for this state aid control is to guarantee a level playing field for businesses in the EU and to avoid wealthier member states excessively favoring their companies.
Given the serious threat that COVID-19 poses not only for public health but also for the entire economy, the EC has issued a communication committing to a quick clearance procedure (so far, approx. 24/48 hours) for all aid measures that member states are planning to take. This refers in particular to measures supporting sectors directly affected by the outbreak – like transport, tourism, culture, hospitality and retail. When assessing aid for these industries, the EC will broadly check (i) the exceptionality of the circumstances, (ii) the fact that the compensated damage is a direct consequence of the natural disaster and (iii) the absence of overcompensation. Other measures not relating to these sectors will be assessed under the usual stricter decision standard of “aid to remedy a serious disturbance in the economy of a Member State.”
Once the aid is approved, companies willing to benefit from such support will have to apply at the national level, going through the administrative process established by the relevant national authorities.
Companies should be mindful that in case unapproved aid (illegal aid) is received, these payments must be recovered by the member state with interest. Competitors and other interested parties aware of illegal aid being granted may lodge complaints to the EC or litigate before national courts. The EC can also launch investigations on its own initiative. Therefore, companies should always carry out legal due diligence and ensure that the aid measure complies with EU and national laws.
Please see below the list of national measures authorized by the EC so far – new measures are submitted every day:
| Member state |
Approval date |
Aid measure |
| Norway |
26 March 2020 |
SMEs provided with state guarantee on loans. The total amount of loans secured through the scheme up to NOK 50 billion (EUR 4.3 billion). |
| Italy |
25 March 2020 |
Debt moratorium for SMEs, including the postponement of repayments of overdraft facilities, bank advances, bullet loans, mortgages and leasing operations. State guarantee on the debt moratorium. |
| Denmark |
25 March 2020 |
Compensation for self-employed suffering turnover losses because of COVID-19. The scheme covers up to DKK 10 billion (approximately EUR 1.3 billion). |
| UK |
25 March 2020 |
Support to SMEs in the form of a loan guarantee (covering 80% of loan facilities, only for companies with GBP 45 million turnover), or in the form of direct grants. The overall budget is GBP 600 million. |
| Luxembourg |
24 March 2020 |
Support to companies and liberal profession in the form of a repayable advance granted to cover their operating costs. The total budget for the scheme is EUR 300 million. |
| Latvia |
23 March 2020 |
Support for undertakings directly hit by COVID-19 either through subsidized loans or through guarantees on loans. |
| Portugal |
22 March 2020 |
State guarantees for SMEs and midcaps on loans. Eligible beneficiaries in four sectors: (i) tourism; (ii) hospitality; (iii) extractive and manufacturing industry; and (iv) event organization. Total budget is EUR 3 billion. |
| Italy |
22 March 2020 |
Aid scheme to support the production and supply of medical devices, such as ventilators, and personal protection equipment, such as masks, goggles, gowns and safety suits. Total budget is EUR 50 million. |
| Germany |
22 March 2020 |
Two aid schemes in the form of (i) a loan program covering up to 90% of the risk for loans for companies of all sizes (up to EUR billion per company) and (ii) a loan program in which the German government participates together with private banks to provide larger loans as a consortium. |
| Denmark |
21 March 2020 |
State guarantees for operating loans to SMEs. Budget up to 1 billion Danish Krone (EUR 130 million). |
| France |
21 March 2020 |
Enterprises with up to 5,000 employees to be provided French state guarantee on (i) commercial loans, and (ii) credit lines. State guarantees to banks on portfolios of new loans for all types of companies. |
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