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EU approves €1.74 billion compensation scheme for Danish mink farmers

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The European Commission has approved, under EU state aid rules, an approximately €1.74 billion (DKK 13bn) Danish scheme to compensate mink farmers and mink-related businesses for measures taken in the context of the coronavirus outbreak. This follows the receipt of a complete notification from Denmark on 30 March 2021.

Executive Vice President Margrethe Vestager, in charge of competition policy, said: “The Danish government took far reaching measures to prevent the spread of new coronavirus variants and new outbreaks among mink, which presented a serious threat to the health of citizens in Denmark and beyond. The DKK 13n scheme approved today (8 April) will enable Denmark to compensate mink farmers and related businesses for damages incurred in this context. We continue to work in close cooperation with member states to ensure that national support measures can be put in place as quickly and effectively as possible, in line with EU rules.”

The Danish support measures

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Following the detection and rapid expansion of several mutated variants of the coronavirus among mink in Denmark, at the beginning of November 2020, the Danish authorities announced their intention of culling all mink in Denmark. In order to avoid a similar situation developing in 2021, the Government also issued a ban on the keeping of minks until beginning 2022.

On 30 March 2021, Denmark sent a complete notification to the Commission on a Danish scheme to compensate mink farmers and mink-related businesses in this context, given the significant economic impact and loss of employment caused by these extraordinary measures. The scheme consists of two measures:

  • The first measure, with a budget of approximately €1.2bn (DKK 9bn), will compensate mink farmers for the temporary ban on mink farming.
  • The second measure, with a budget of approximately €538 million (DKK 4bn), will support mink farmers and mink-related businesses who are willing to give up their production capacity to the state.

Support under both measures will take the form of direct grants.

Compensation to mink farmers for temporary ban

The direct grants to compensate for the ban on mink farming will cover all fixed costs for those mink farmers that will temporarily close production until the ban on mink farming is lifted on 1 January 2022. This period may be extended by one year.

The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European (TFEU), which enables the Commission to approve State aid measures granted by Member States to compensate specific companies or specific sectors for the damage directly caused by exceptional occurrences.

The Commission considers that the coronavirus outbreak qualifies as such an exceptional occurrence, as it is an extraordinary, unforeseeable event having a significant economic impact. As a result, exceptional interventions by member states to avoid the emergence of new coronavirus variants and prevent new outbreaks, such as the temporary ban on mink farming, and the compensation for the damages linked to these interventions are justified.

The Commission found that the Danish measure will compensate the damages suffered by mink farmers that are directly linked to the coronavirus outbreak, since the ban on the keeping of mink until beginning 2022 can be considered as a damage directly linked to the exceptional occurrence.

The Commission also found that the measure is proportionate, as an independent valuation commission, appointed by the Danish Veterinary and Food Administration and directly reporting to them, will make an assessment of necessary fixed costs and maintenance costs on the specific farms during the shutdown period, including by carrying out on-site inspections. This will make sure that the amount of compensation only covers the actual damage suffered by the farmers.

Support to mink farmers and related businesses who will give up their production capacity to the state

This scheme will compensate mink farmers who will give up their production capacity to the Danish State for the long-term, with a view to restructuring an industry prone to the appearance of new coronavirus variants that could threaten to prolong the current crisis and the disturbance to the Danish economy. It will be calculated based on two overall loss items of mink farmers: i) their loss of income for a ten year budget period; and ii) the residual value of the mink farmer's capital stock (buildings, machinery, etc.).

Mink-related businesses that significantly rely on mink production will also be eligible for support under this measure (specialised feed centers and providers, skinning factories, the auctioneer Kopenhagen Fur, etc). A valuation commission will assess that they fulfill a number of conditions, namely that at least 50% of the businesses' turnover in the period 2017-2019 is related to the Danish mink industry and that the business cannot directly convert the production into other activities. The aid will equal the value of the part of the business that cannot directly convert its production into other activities.

A precondition for receiving support under this measure is that the State takes over the assets (all production equipment, stables, machinery, etc.), which will no longer be available to the farmers or to related businesses, respectively.

The Commission assessed the measure under EU State aid rules, and in particular Article 107(3)(b) TFEU, which enables the Commission to approve State aid measures implemented by Member States to remedy a serious disturbance in their economy. The Commission found that the Danish scheme is in line the principles set out in the EU Treaty and is well targeted to remedy to a serious disturbance to the Danish economy.

The Commission found that the Danish measure will offer support that is directly linked to the need to remedy a serious disturbance in the economy of Denmark and safeguard the European and global efforts towards the end of the pandemic also thanks to an effective vaccine, by restructuring an industry that is prone to the appearance of new coronavirus variants. It also found that the measure is proportionate, based on a clear method of calculation and safeguards to ensure that the aid does not exceed what is necessary. In particular, the calculations of the aid are tailored to the mink farming sector and related businesses, based on representative reference data, individual appraisals and acceptable valuation and depreciation methods.

The Commission therefore concluded that the measure will contribute to managing the economic impact of the coronavirus in Denmark. It is 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 general principles set out in the Temporary Framework.

On this basis, the Commission concluded that the two Danish measures are in line with EU state aid rules.

Background

These measures are complementary to those already taken by the Danish authorities under Article 26 of the Agricultural Block Exemption Regulation (ABER), by which direct grants will be awarded for the culling of minks on public health grounds, as well as an “additional” bonus for their rapid culling. See SA.61782 for more information.

Financial support from EU or national funds granted to health services or other public services to tackle the coronavirus situation falls outside the scope of State aid control. The same applies to any public financial support given directly to citizens. Similarly, public support measures that are available to all companies such as for example wage subsidies and suspension of payments of corporate and value added taxes or social contributions do not fall under State aid control and do not require the Commission's approval under EU State aid rules. In all these cases, Member States can act immediately. When State aid rules are applicable, Member States can design ample aid measures to support specific companies or sectors suffering from the consequences of the coronavirus outbreak in line with the existing EU State aid framework.

On 13 March 2020, the Commission adopted a Communication on a Coordinated economic response to the COVID-19 outbreak setting out these possibilities.

In this respect, for example:

  • Member states can compensate specific companies or specific sectors (in the form of schemes) for the damage suffered due and directly caused by exceptional occurrences, such as those caused by the coronavirus outbreak. This is foreseen by Article 107(2)(b)TFEU.
  • State aid rules based on Article 107(3)(c) TFEU enable member states to help companies cope with liquidity shortages and needing urgent rescue aid.
  • This can be complemented by a variety of additional measures, such as under the de minimis Regulations and the Block Exemption Regulations, which can also be put in place by member states immediately, without involvement of the Commission.

In case of particularly severe economic situations, such as the one currently faced by all Member States due the coronavirus outbreak, EU state aid rules allow member states to grant support to remedy a serious disturbance to their economy. This is foreseen by Article 107(3)(b) TFEU of the Treaty on the Functioning of the European Union.

On 19 March 2020, the Commission adopted a state aid Temporary Framework based on Article 107(3)(b) TFEU to enable member states to use the full flexibility foreseen under State aid rules to support the economy in the context of the coronavirus outbreak. The Temporary Framework, as amended on 3 April, 8 May, 29 June13 October 2020 and 28 January 2021, provides for the following types of aid, which can be granted by member states: (i) Direct grants, equity injections, selective tax advantages and advance payments; (ii) State guarantees for loans taken by companies; (iii) Subsidized public loans to companies, including subordinated loans; (iv) Safeguards for banks that channel State aid to the real economy; (v) Public short-term export credit insurance;(vi) Support for coronavirus related research and development (R&D); (vii) Support for the construction and upscaling of testing facilities; (viii) Support for the production of products relevant to tackle the coronavirus outbreak; (ix) Targeted support in the form of deferral of tax payments and/or suspensions of social security contributions; (x) Targeted support in the form of wage subsidies for employees; (xi) Targeted support in the form of equity and/or hybrid capital instruments; (xii) Support for uncovered fixed costs for companies facing a decline in turnover in the context of the coronavirus outbreak.

The Temporary Framework will be in place until the end of December 2021. With a view to ensuring legal certainty, the Commission will assess before this date if it needs to be extended.

The non-confidential version of the decision will be made available under the case number SA.61945 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.

More information on the Temporary Framework and other action the Commission has taken to address the economic impact of the coronavirus pandemic can be found here.

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Norway again postpones end to COVID lockdown

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A man wearing a protective mask carries shopping bags as he walks on the streets of Oslo following an outbreak of the coronavirus disease (COVID-19), in Oslo, Norway. NTB Scanpix/Hakon Mosvold Larsen via REUTERS

Norway postponed for a second time on Wednesday (28 July) a planned final step in the reopening of its economy from pandemic lockdown, due to the continued spread of the Delta variant of COVID-19, the government said, writes Terje Solsvik, Reuters.

"A new assessment will be made in mid-August," Health Minister Bent Hoeie told a news conference.

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Measures that will be kept in place to halt the spread of COVID-19 include bars and restaurants being limited to table service and limits of 20 people on gatherings in private homes.

The government in April launched a four-step plan to gradually remove most pandemic restrictions, and had completed the first three of those steps by mid-June.

On July 5, Prime Minister Erna Solberg said the fourth step could come in late July or early August at the earliest because of concerns about the Delta coronavirus variant. Read more.

About 80% of adults in Norway have received a first dose of a COVID-19 vaccine and 41% of adults are fully vaccinated, according to the Norwegian Institute of Public Health.

Thanks to an early lockdown in March 2020 and tight restrictions that followed, the nation of 5.4 million people has seen one of Europe's lowest rates of mortality from the virus. Some 800 Norwegians have died from COVID-19.

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EU signs deal with GSK for supply of potential COVID drug

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Company logo of pharmaceutical company GlaxoSmithKline is seen at their Stevenage facility, Britain October 26, 2020. REUTERS/Matthew Childs/File Photo

The European Union has signed a contract with GlaxoSmithKline (GSK.L) for the supply of up to 220,000 treatments of its investigational monoclonal antibody therapy sotrovimab against COVID-19, it said on Wednesday (28 July), write Francesco Guarascio with additional reporting by Jo Mason, Reuters.

The drug, which is developed together with U.S. firm Vir Biotechnology (VIR.O), can be used for the treatment of high-risk coronavirus patients with mild symptoms who do not require supplemental oxygen, according to the Commission.

The deal is a boost to GSK work on potential treatments for COVID-19 after the company played a limited role in the development of vaccines. Rather than making its own coronavirus shot, GSK has focused on supplying its booster to other developers and has partnered with Sanofi (SASY.PA) to develop a jab.

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GSK confirmed the deal in a statement on Wednesday, saying it represented "a crucial step forward for treating cases of COVID-19" in Europe.

The drug is currently being assessed by the European Medicines Agency (EMA) under a rolling review.

It has received emergency authorisation in the United States to treat mild-to-moderate COVID-19 patients who are at high risk of developing a severe infection.

The contract has been backed by 16 of the 27 EU states, which can buy the drug only after it is approved by EMA or by national drug regulators. The price agreed for potential purchases has not been disclosed. A spokesman for the Commission declined to comment on the matter.

Monoclonal antibodies mimic natural antibodies that the body generates to fight infection.

The deal with GSK follows a contract the EU signed in April with Swiss pharmaceutical giant Roche (ROG.S) to secure about 55,000 doses of a potential treatment based on a cocktail of monoclonal antibodies developed by Roche together with U.S. drugmaker Regeneron (REGN.O). Read more.

Apart from monoclonal treatments, the only other anti-COVID drug the EU has bought is Gilead's (GILD.O) remdesivir, an antiviral medicine. Last year, the EU reserved half a million courses after the drug obtained a conditional EU approval.

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Coronavirus disinformation: Online platforms take new actions and call for more players to join the Code of Practice

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The Commission has published the reports by Facebook, Twitter, TikTok, Microsoft and Google on measures taken in June to combat coronavirus disinformation. The current signatories and the Commission are also calling on new companies to join the Code of Practice on disinformation as it will help broaden its impact and make it more effective. Values and Transparency Vice President Věra Jourová said: “The COVID-19 disinformation monitoring programme has allowed to keep track of important actions put in place by online platforms. With new variants of the virus spreading and vaccinations continuing at full speed, it is crucial to deliver on the commitments. We look forward to the strengthening of the Code of Practice.”

Internal Market Commissioner Thierry Breton added: “The EU stood by its promise to deliver enough doses to safely vaccinate every EU citizen. All stakeholders now need to assume their responsibility to beat vaccine hesitancy spurred by disinformation. While we are strengthening the Code of Practice with platforms and signatories, we are calling for new signatories to join the fight against disinformation”. 

For example, TikTok's campaign supporting vaccination, with the Irish government, reached over one million views and over 20,000 likes. Google continued to work with public health authorities to show information about vaccination locations in Google Search and Maps, a feature available in France, Poland, Italy, Ireland, and Switzerland. On Twitter, users can now train automated systems to better identify violations of the platform's COVID-19 disinformation policy.

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Microsoft extended its partnership with NewsGuard, an Edge extension that warns about websites spreading disinformation. Facebook cooperated with international health authorities to increase public awareness of vaccine efficacy and safety and with Michigan State University (MSU) researchers to better detect and attribute deepfakes. These joint efforts need to continue in view of the persisting and complex challenges that online disinformation still presents. The Commission's COVID-19 disinformation monitoring programme has been extended until the end of 2021 and reports will now be published every two months. The next set of reports will be published in September. Following the recently published Guidance, the signatories have kicked off the process to strengthen the Code and launched a joint call for interest for potential new signatories.

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