Commission prolongs EU state aid rules and adopts targeted adjustments to mitigate impact of #Coronavirus outbreak

The European Commission has prolonged the validity of certain state aid rules which would otherwise expire at the end of 2020. In this context, and to take the effects of the current crisis into due consideration, the Commission, after consulting member states, has decided to make certain targeted adjustments to the rules which are being prolonged as well as to the  Framework for state aid for research and development and innovation (which has no expiry date), with a view to mitigate the economic and financial impact of the coronavirus outbreak on companies.

To this end, the Commission has adopted a new Regulation amending the General Block Exemption Regulation (GBER) and the de minimis Regulation, and a Communication amending seven sets of State aid guidelines and prolonging those which would otherwise expire on 31 December 2020. The targeted changes will concern, in particular: (i) undertakings in difficulty: many companies which were healthy before the crisis are experiencing difficulties due to the severe consequences of the outbreak.

The Commission has therefore introduced targeted changes to the existing rules to allow companies which entered into difficulties as a result of the coronavirus outbreak, and which would not, under existing rules, be able to receive certain types of aid, to remain eligible to receive aid under the GBER and other sets of rules for a set period of time during and after the crisis; and (ii) job relocations: companies which have received regional investment aid falling under the GBER in the past may have committed in good faith not to relocate in the coming years.

However, due to the coronavirus outbreak, it may not be possible for companies to avoid job losses. The Commission has therefore introduced certain targeted changes to the existing rules to ensure that job losses that a company may incur due to the coronavirus outbreak would not be considered as a relocation and hence a breach of the commitments previously undertaken. In parallel, the Commission has recently proposed to prolong the SGEI de minimis Regulation, which will also otherwise expire on 31 December 2020,by three years. In this context, the Commission is also proposing to introduce an adjustment to this regulation to allow undertakings that entered into difficulty because of the coronavirus outbreak to remain eligible for this type of aid for a limited period of time. The full press release is available online.

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