Many Member States are taking measures to support the economy during the COVID-19 crisis. The European Commission’s Temporary Framework enables the rapid approval of certain types of State aid. So far, three Dutch State aid schemes and six Belgian schemes were approved, providing the beneficiaries with legal certainty that the aid received is in line with EU State aid law and cannot be challenged at a later stage.
In response to the economic impact of the COVID-19 crisis, the Commission adopted a Temporary Framework for COVID-19 State aid measures (“Temporary Framework”) on 19 March 2020. The Temporary Framework is based on Art. 107(3) (b) of the Treaty on the Functioning of the European Union, which allows Member States to “remedy a serious disturbance in the economy of a Member State”. See the Stibbe alerts of 16 April 2020 and 8 April 2020 for more background on the Temporary Framework.
The Dutch and Belgian governments have adopted an arsenal of measures designed to provide emergency assistance to the economy and protect employment. Some of these measures qualify as State aid under EU Law and require the Commission’s approval prior to implementation.
So far, the Commission has approved three of the Dutch government’s measures, in particular:
- Guarantee scheme for SMEs and large enterprises (Garantie Ondernemingsfinanciering (GO) and Borgstelling MKG-kredieten (BMKB)).
The measure provides State guarantees for loans for small, medium-sized and large enterprises. The guarantee covers 90% of the non-amortised part of loans to small and medium-sized enterprises and 80% of the non-amortised part of loans to large enterprises (see also the Stibbe alert of 16 April 2020).
On 22 April 2020, the Commission approved the two schemes, on the grounds that (i) the guarantees can only be granted until the end of 2020, (ii) the loan per company is limited to what is needed to cover its liquidity needs for the near future, (iii) the guarantees are limited to a maximum of six years, and (iv) companies which were already in difficulty on 31 December 2019 are not eligible. The scheme also introduces safeguards to avoid indirect aid in favour of credit institutions, and requires banks to extend a loan repayment moratorium to borrowers of at least six months.
The total size of the scheme is up to EUR 10 billion.
- Support for e-health applications
The measure allows providers of healthcare services to apply for direct grants for e-health applications, for example apps to ensure proper drug dosage and use or apps for digital wound care. The goal of these measures is to contribute to the continuity of support and remote care for patients.
On 3 April 2020, the Commission approved the scheme. In particular, the maximum aid amount does not exceed EUR 800,000 per undertaking, and is not available to companies that were already in difficulty on 31 December 2019. In total, the Dutch government has earmarked EUR 23 million under this scheme.
3. Subsidised interest rates scheme for SMEs (Corona-Overbruggingslening)
This measure takes the form of subsidised interest rates for investment and working capital loans for SMEs active in the Netherlands, excluding financial institutions.
On 22 April 2020, the Commission approved the scheme, considering in particular that (i) the loans are granted at all-in flat interest rates between 200 and 500 basis points per year for the entire duration of the loan, (ii) contracts are signed before the end of 2020 and limited to a maximum of five years, and (iii) the overall amount of the loans per beneficiary is limited to EUR 2 million.
To date, the Commission has approved six measures taken by the Belgian federal and regional governments (for a more detailed overview: see the Stibbe alert of 21 April 2020):
- Federal loan guarantee scheme
The measure provides state guarantees on loans for SMEs and large companies. The principal amount of the guaranteed loan cannot exceed EUR 50 million or the borrower’s liquidity needs for its activities for a maximum of 12 months (18 months for SMEs).
On 11 April 2020, the Commission approved the scheme based on the general criteria for compatibility under Article 107 (3) (b) TFEU, and using the Temporary Framework as guidance.
- Regional loan guarantee schemes
Both Flanders and Wallonia provide state guarantees on loans for companies active in respectively Flanders and Wallonia.
On 9 April 2020, the Commission approved the Flemish scheme under the Temporary Framework as (i) the guarantees may only be granted until the end of 2020; (ii) the loan per company is limited to what is needed to cover its liquidity needs for the near future; (iii) the guarantees are limited to a maximum of six years; and (iv) companies which were already in difficulty on 31 December 2019 are excluded. In addition, the scheme introduces safeguards to avoid indirect aid in favour of credit institutions. On 30 April 2020, the Commission approved the Walloon scheme for the same reasons.
- Payment deferral of concession fees for Walloon airports
The measure provides payment deferral of concession fees for Walloon airports.
On 11 April 2020, the Commission approved the scheme under the Temporary Framework as the payment deferral (i) may only be granted until the end of 2020; (ii) is limited to a maximum of six years; and, (iii) involves minimum remuneration in line with the Temporary Framework.
- Direct grants for Brussels’s Capital Region’s companies active in the primary production of agricultural products and the aquaculture sector
The measure provides direct grants up to EUR 3,000 for Brussels Capital Region’s companies active in the primary production of agricultural products, and in aquaculture for the food sector.
On 24 April 2020, the Commission approved the scheme under the Temporary Framework as (i) companies, which were already in difficulty on 31 December 2019, are excluded; (ii) the grant can only be granted until the end of 2020; and, (iii) the maximum aid amount does not exceed EUR 120,000 per company active in the fishery and aquaculture sector and EUR 100,000 per company active in the primary production of agricultural products;
- Brussels Capital Region R&D scheme
The measure provides direct grants for Brussels Capital Region companies that intend to carry out COVID-19 R&D projects.
On 27 April 2020, the Commission approved the scheme under the Temporary Framework as (i) beneficiaries shall commit to grant non-exclusive licenses to third parties in other EEA States; (ii) costs necessary for the duration of the R&D project are eligible for aid; and, (iii) the cross border collaboration bonus does not exceed 15 percentage points.
More about the coronavirus
You can read more publications on the impact of the coronavirus on our website. Here you will also find a list of contacts within our organisation who can advise you with questions about the implications of the coronavirus for your company.
This article was published in the Competition Newsletter of May 2020. Other articles in this newsletter: