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The European Commission has found a €10 billion German scheme to compensate companies for damages related to the coronavirus outbreak to be in line with State Aid Temporary Framework. Under the scheme, companies from all sectors will be entitled to compensation for certain damages suffered due to the full closure of their activities as a result of the coronavirus outbreak and the restrictive measures that the German government had to introduce to contain the spread of the virus. The compensation period will depend on whether restrictions are in place in the period between 16 March 2020 and 31 December. The compensation, in the form of direct grants, can cover up to 100% of the actual damage incurred by the beneficiaries during the eligible period, and can only be granted after damage is incurred.
The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve state aid measures granted by member states to compensate specific companies or sectors for 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. The Commission found that the German aid scheme will compensate damages that are directly linked to the coronavirus outbreak. The Commission therefore concluded that the scheme is in line with EU state aid rules.
Vice President Margrethe Vestager, in charge of competition policy, said: “This €10 billion scheme enables Germany to compensate, at least in part, businesses of all sectors for the damages suffered and emergency measures taken to limit the spread of the coronavirus. We continue working closely with member states to find workable solutions to support companies in these difficult times, in line with EU rules.” The non-confidential version of the decision will be made available under the case number SA.62784 in the state aid register on the Commission’s competition website once any confidentiality issues have been resolved. A full press release is available online.
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