Commission approves €840 million German guarantee scheme to protect consumers and support the travel industry in the context of the #Coronavirus outbreak

The European Commission has approved, under EU state aid rules, a German state guarantee scheme worth €840 million to cover vouchers issued by travel operators for cancelled travel packages booked prior to 8 March 2020. This scheme is in line with the objectives pursued by the Commission Recommendation (EU) 2020/648 adopted on 13 May 2020 to make vouchers an attractive and reliable alternative to cash reimbursements.

All customers of travel organizers who have a right to a refund under the EU Package Travel Directive can benefit from these secured vouchers regardless of their service provider as long as German law is applicable.With this scheme, the German state aims at ensuring that any traveller that accepts a voucher issued by a travel operator will be able to either use it or receive a full refund. The vouchers will remain valid until 31 December 2021. If not used before this date, the full amount paid will be reimbursed to the customer.

By guaranteeing repayment of these vouchers in the event of insolvency of the tour operator concerned, today's scheme aims (i) to protect consumers, (ii) to ensure effective settlement of related refunds or reimbursements to travellers, and (iii) to ease liquidity pressure on the travel industry by encouraging the uptake of vouchers instead of direct repayment The Commission found that the measure is in line with Article 107(3)(b) TFEU, which enables the Commission to approve state aid measures to remedy a serious disturbance to the economy of a member state.

The Commission found that the scheme is necessary, appropriate and proportionate to remedy a serious disturbance in the German economy. On this basis, the Commission approved the measure under EU state aid rules. Executive Vice President Margrethe Vestager, in charge of competition policy, said: "The rights of consumers to be compensated for cancelled bookings must be ensured, even in these difficult times for the travel industry due to the coronavirus outbreak. The use of vouchers should be encouraged and travelers should be able to accept them without fear of losing their money. This €840 million German guarantee scheme will protect consumers, while helping companies in the travel industry to cover their immediate liquidity needs and continue their activities.”

A press release is available online.

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