EU Commission: Temporary Crisis Framework for economic support

May 13, 2022 Benn-Ibler Rechtsanwälte

The European Commission has adopted an addition to state aid law due to Russia's invasion of Ukraine.

The Temporary Crisis Framework is intended to provide new possibilities for member states to support businesses, in coordination with existing state aid law. Several options are to be created:

1. Limited aid to companies affected by the current crisis or the sanctions and counter-sanctions imposed as a result.
2. Framework conditions to ensure that companies continue to have sufficient liquidity at their disposal.
3. Compensation of additional costs for companies for exceptionally high gas and electricity prices.

However, these additions also come with certain precautions: Member States are required to include sustainability requirements for the granting of aid resulting from high gas and electricity prices. Furthermore, there must be a connection between the amount of aid, the scope of the economic activity and the impact of the crisis on the company. In addition, an energy-intensive company according to Article 17 para 1 lit a of the Energy Taxation Directive must exist, which is characterised by energy procurement costs of at least 3% of its production value.

The changes are detailed as follows:

In the crisis framework based on Art. 107 para 3 lit b of the Treaty on the Functioning of the European Union (TFEU), three types of aid are established:

On the one hand, limited amounts of aid are available for companies in agriculture, fisheries or aquaculture in the amount of EUR 35,000 per company. In other sectors, businesses can receive up to EUR 400,000. This aid can take any form, including direct grants. On the other hand, subsidized state guarantees and low-interest public and private loans may also be granted. Special concessions apply to small and medium-sized enterprises (SMEs). Finally, compensation payments based on energy prices can also be granted. These may again take any form, but may not exceed 30% of the eligible costs per recipient at any time, or in any case not more than EUR 2 million.

The temporary crisis framework is valid until December 31, 2022 and is evaluated by the EU Commission on an ongoing basis.

STATEMENT/22/1949 (23.03.2022)