Commission approves German ‘umbrella' scheme to support uncovered fixed costs of companies affected by coronavirus outbreak

The European Commission has approved a German ‘umbrella' scheme to support the uncovered fixed costs of companies affected by the coronavirus outbreak. The scheme was approved under the state aid Temporary Framework. Under the scheme, Germany plans to provide extraordinary economic assistance to all businesses, self-employed individuals, associations and institutions whose operations are temporarily closed as a result of the lockdown measures imposed by the government to limit the spread of the virus.

The measure is a Germany-wide ‘umbrella' scheme with an estimated budget of €30 billion.  Under the umbrella scheme, support can take the form of i) direct grants; ii) state guarantees for loans (granted through credit institutions and other financial institutions as financial intermediaries); or iii) subsidized public loans. In particular, the umbrella scheme will also enable Germany to grant part of its ‘Novemberhilfe', i.e. support for companies affected by the lockdown measures implemented in November 2020.

The Commission found that the German umbrella scheme is in line with the conditions set out in the Temporary Framework. The Commission concluded that the measures under the umbrella scheme are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework.

On this basis, the Commission approved the aid measure under EU State aid rules. Executive Vice President Margrethe Vestager, in charge of competition policy, said: “Many shops, restaurants and other businesses have faced a significant decline in turnover because of the recent lockdown measures necessary to limit the spread of the coronavirus. This “umbrella” scheme will enable Germany to support companies face their fixed costs that are not covered by their revenues during these difficult times. We continue to work closely with all member states to ensure that national support measures can be put in place in a timely, coordinated and effective way, in line with EU rules.” The full press release is available online. 

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