The European Commission amended the Temporary Framework for State Aid in connection with COVID-19

08. 04. 2020

Authors: Petr Kadlec, Jakub Kocmánek

On 3 April 2020, the European Commission amended its Communication of 19 March 2020 called the Temporary Framework for state aid measures to support the economy in the current COVID-19 outbreak (the “Temporary Framework”).[1] We provided you with our roundup of the previous wording of the Temporary Framework earlier.[2]

Precision of the terms governing the cumulation of individual types of state aid:

The Commission specified in more detail the terms governing the cumulation of individual types of aid. Aid granted in the form of guarantees on loans and grants for interest regarding a single principal can be cumulated only if the loan amount does not exceed double the amount of the super-gross personnel expenses or 25% of the annual turnover of the enterprise, or higher in justified cases.

Aid for COVID-19 relevant research and development:

Member States will be allowed to provide direct grants, repayable advances or tax advantages for relevant R&D projects carrying out COVID-19 and another relevant antiviral research. Aid for fundamental research projects may cover up to 100% of the eligible costs, for industrial research and experimental development up to 80% of the eligible costs (the cap may be increased to up to 95% for cross-border cooperation projects). The R&D aid may not be cumulated with aid for the same eligible costs spent on the manufacturing of antiviral products (point C) below).

Aid for testing and upscaling infrastructures to develop COVID-19 relevant products:

The aid can be provided in the form of direct grants, tax advantages or repayable advances before the end of 2020. The aid may not exceed 75% of the eligible costs spent on the testing and upscaling infrastructure, while the aid for the actual expansion of production may not exceed 80% of costs. The limits may be increased by as much as 15 percentage points if the project was completed within two months after the date of granting the aid or if it involved cross-border cooperation. Where the aid was simultaneously granted in the form of repayable advance payment, the limit may be increased by up to 30%. If a project is not completed within six months after receiving the aid, the aid will have to be reimbursed. A loss cover guarantee may be granted in addition to a direct grant.

Aid in the form of deferrals of taxes and mandatory levies:

The Commission concluded that deferrals of taxes and mandatory levies aimed selectively at undertakings (including self-employed persons) in certain areas or fields that have been strongly affected by the outbreak of the COVID-19 pandemic can be considered as compatible with the internal market. Non-selective aid of this kind vis-à-vis all undertakings is not considered state aid.

Wage subsidies to avoid lay-offs:

Member States can provide wage subsidies for employees and self-employed persons in certain sectors or fields. The subsidy may be granted for a period of twelve months and may cover up to 80% of monthly gross salaries (including social security contributions) of employees who would otherwise be laid off. Non-selective aid of this kind vis-à-vis all undertakings is not considered state aid.

Change in the terms governing short-term export credit insurance:

When amending the Temporary Framework, the Commission cancelled the condition for proving that otherwise commercially insurable risks cannot be currently insured against as a result of the outbreak of the COVID-19 pandemic. Now it will be possible to support export credit insurance to all countries throughout the world with the exception of EEA, USA, Canada, Australia, New Zealand and Japan.


[1] Amendment to the Temporary Framework: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.CI.2020.112.01.0001.01.ENG&toc=OJ:C:2020:112I:TOC

Original wording of the Temporary Framework: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52020XC0320(03).

[2] https://www.havelpartners.cz/docasny-ramec-evropske-komise-pro-verejnou-podporu-v-souvislosti-s-covid-19/

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