The European Fee has accepted an roughly €1.4 billion (SEK 14bn) Swedish scheme to help the uncovered fastened prices of corporations affected by the coronavirus outbreak. The scheme was accepted below the state assist Momentary Framework.
Govt Vice President Margrethe Vestager, in command of competitors coverage, stated: “Swedish corporations have skilled a major decline of their revenues due to the restrictive measures put in place to restrict the unfold of the coronavirus. This €1.4bn scheme will allow Sweden to help corporations affected by the coronavirus outbreak, by serving to them cowl their fastened prices that aren’t lined by their revenues. We proceed working in shut cooperation with member states to seek out workable options to mitigate the financial influence of the coronavirus outbreak, according to EU guidelines.”
The Swedish help measure
Sweden notified to the Fee an roughly €1.4 billion (SEK 14 billion) scheme to additional help corporations affected by the coronavirus outbreak below the Momentary Framework.
Underneath the scheme, the general public help will take the type of direct grants. The scheme will likely be open to corporations lively in all sectors besides the monetary sector. The scheme covers three eligible intervals: (i) August–October 2020, (ii) November–December 2020, and (iii) January–February 2021. The help will likely be granted to corporations that suffered a turnover decline exceeding 40% within the interval August-October 2020 or 30% in every of the intervals November-December 2020 and January-February 2021, in comparison with the identical intervals in 2019. The beneficiaries will obtain grants protecting as much as 70% of their uncovered fastened prices in the course of the eligible intervals. Within the case of micro and small enterprises, the grants will cowl as much as 75% of the uncovered fastened prices with regard to the interval August-October 2020, or 90% within the different intervals.
The aim of the scheme is to mitigate the financial difficulties and the sudden liquidity shortages that the beneficiaries are dealing with as a result of restrictive measures imposed by the Swedish authorities to restrict the unfold of the coronavirus.
The Fee discovered that the Swedish scheme is according to the situations set out within the Momentary Framework. Specifically, the help (i) won’t exceed €10 million per firm; (ii) will cowl uncovered fastened prices incurred throughout a interval comprised between 1 March 2020 and 31 December 2021; and (iii) will likely be granted earlier than 31 December 2021.
The Fee concluded that the measure is critical, acceptable and proportionate to treatment a critical disturbance within the financial system of a Member State, according to Article 107(3)(b) TFEU and the situations set out within the Momentary Framework.
On this foundation, the Fee accepted the measure below EU State assist guidelines.
The Fee has adopted a Momentary Framework to allow member states to make use of the complete flexibility foreseen below State assist guidelines to help the financial system within the context of the coronavirus outbreak. The Momentary Framework, as amended on 3 April, 8 Might, 29 June, 13 October 2020 and 28 January 2021, gives for the next kinds of assist, which may be granted by Member States:
(i) Direct grants, fairness injections, selective tax benefits and advance funds of as much as €225,000 to an organization lively within the major agricultural sector, €270,000 to an organization lively within the fishery and aquaculture sector and €1.8 million to an organization lively in all different sectors to handle its pressing liquidity wants. Member States may also give, as much as the nominal worth of €1.8 million per firm zero-interest loans or ensures on loans protecting 100% of the chance, besides within the major agriculture sector and within the fishery and aquaculture sector, the place the bounds of €225,000 and €270,000 per firm respectively, apply.
(ii) State ensures for loans taken by corporations to make sure banks maintain offering loans to the purchasers who want them. These state ensures can cowl as much as 90% of threat on loans to assist companies cowl instant working capital and funding wants.
(iii) Subsidised public loans to corporations (senior and subordinated debt) with beneficial rates of interest to corporations. These loans may also help companies cowl instant working capital and funding wants.
(iv) Safeguards for banks that channel State assist to the actual financial system that such assist is taken into account as direct assist to the banks’ prospects, to not the banks themselves, and offers steering on how to make sure minimal distortion of competitors between banks.
(v) Public short-term export credit score insurance coverage for all nations, with out the necessity for the Member State in query to display that the respective nation is briefly “non-marketable”.
(vi) Help for coronavirus associated analysis and improvement (R&D) to handle the present well being disaster within the type of direct grants, repayable advances or tax benefits. A bonus could also be granted for cross-border cooperation initiatives between Member States.
(vii) Help for the development and upscaling of testing amenities to develop and take a look at merchandise (together with vaccines, ventilators and protecting clothes) helpful to sort out the coronavirus outbreak, as much as first industrial deployment. This may take the type of direct grants, tax benefits, repayable advances and no-loss ensures. Corporations might profit from a bonus when their funding is supported by a couple of Member State and when the funding is concluded inside two months after the granting of the help.
(viii) Help for the manufacturing of merchandise related to sort out the coronavirus outbreak within the type of direct grants, tax benefits, repayable advances and no-loss ensures. Corporations might profit from a bonus when their funding is supported by a couple of Member State and when the funding is concluded inside two months after the granting of the help.
(ix) Focused help within the type of deferral of tax funds and/or suspensions of social safety contributions for these sectors, areas or for kinds of corporations which are hit the toughest by the outbreak.
(x) Focused help within the type of wage subsidies for workers for these corporations in sectors or areas which have suffered most from the coronavirus outbreak, and would in any other case have needed to lay off personnel.
(xi) Focused recapitalisation assist to non-financial corporations, if no different acceptable resolution is obtainable. Safeguards are in place to keep away from undue distortions of competitors within the Single Market: situations on the need, appropriateness and measurement of intervention; situations on the State’s entry within the capital of corporations and remuneration; situations concerning the exit of the State from the capital of the businesses involved; situations concerning governance together with dividend ban and remuneration caps for senior administration; prohibition of cross-subsidisation and acquisition ban and extra measures to restrict competitors distortions; transparency and reporting necessities.
(xii) Help for uncovered fastened prices for corporations dealing with a decline in turnover in the course of the eligible interval of at the least 30% in comparison with the identical interval of 2019 within the context of the coronavirus outbreak. The help will contribute to part of the beneficiaries’ fastened prices that aren’t lined by their revenues, as much as a most quantity of €10 million per endeavor.
The Fee can even allow member states to transform till 31 December 2022 repayable devices (e.g. ensures, loans, repayable advances) granted below the Momentary Framework into different types of assist, resembling direct grants, offered the situations of the Momentary Framework are met.
The Momentary Framework allows member states to mix all help measures with one another, aside from loans and ensures for a similar mortgage and exceeding the thresholds foreseen by the Momentary Framework. It additionally allows member states to mix all help measures granted below the Momentary Framework with current potentialities to grant de minimis to an organization of as much as €25,000 over three fiscal years for corporations lively within the major agricultural sector, €30,000 over three fiscal years for corporations lively within the fishery and aquaculture sector and €200,000 over three fiscal years for corporations lively in all different sectors. On the identical time, member states need to decide to keep away from undue cumulation of help measures for a similar corporations to restrict help to fulfill their precise wants.
Moreover, the Momentary Framework enhances the various different potentialities already obtainable to Member States to mitigate the socio-economic influence of the coronavirus outbreak, according to EU State assist guidelines. On 13 March 2020, the Fee adopted a Communication on a Coordinated financial response to the COVID-19 outbreak setting out these potentialities. For instance, Member States could make usually relevant modifications in favour of companies (e.g. deferring taxes, or subsidising short-time work throughout all sectors), which fall exterior State Support guidelines. They’ll additionally grant compensation to corporations for injury suffered resulting from and instantly attributable to the coronavirus outbreak.
The Momentary Framework will likely be in place till the tip of December 2021. With a view to making sure authorized certainty, the Fee will assess earlier than this date if it must be prolonged.
The non-confidential model of the choice will likely be made obtainable below the case quantity SA.60275 within the state assist register on the Fee’s competitors web site as soon as any confidentiality points have been resolved. New publications of State assist selections on the web and within the Official Journal are listed within the State Support Weekly e-Information.
Extra info on the Momentary Framework and different motion the Fee has taken to handle the financial influence of the coronavirus pandemic may be discovered right here.