Temporary Crisis Framework for the provision of State Aid to cope with the economic consequences of the Russia´s invasion of Ukraine

2022-03-24
The European Commission adopted a temporary crisis framework to allow Member States to use the flexibility set out in State aid rules, and, thus, support the economy affected by the impacts of the Russia’s invasion of Ukraine.

The impacts of the war and the adopted anti-Russian sanctions are taking their toll on the European economy and will continue to do so in the coming months. The European Commission and Member States have therefore prepared systemic measures to support severely affected undertakings and sectors while ensuring the protection of equal conditions in the single market. Aid granted under the temporary crisis framework must be notified by the provider to the European Commission, via the Office for the Protection of Competition. Aid can only be granted after a positive decision by the European Commission.

The Temporary Crisis Framework for State aid to support the economy in the context of the Russian invasion of Ukraine, which is based on Article 107(3)(b) of the Treaty on the Functioning of the European Union, states that the whole EU economy is seriously disrupted. In order to remedy this, it sets out three types of aid:

1) Limited amounts of aid: Member States will be able to introduce schemes under which they will grant up to EUR 35,000 to affected undertakings operating in agriculture, fisheries and aquaculture and up to EUR 400,000 to affected undertakings operating in other sectors.

2) Liquidity support in the form of state guarantees and subsidised loans: Member States will be able to provide (i) subsidised state guarantees with the aim to ensure that banks continue to provide loans to all undertakings affected by the ongoing crisis and (ii) public and private loans with subsidised interest rates.

For both types of aid, there are limits regarding the maximum amount of the loan, which are based on the undertaking's operating needs and consider its turnover, energy costs and specific liquidity needs. Loans can cover both investment needs and working capital needs.

3) Aid to compensate for high energy prices: Member States will be able to partially compensate undertakings, especially those which are intensive energy users, for the additional costs incurred as a result of the abnormal increase in gas and electricity prices. This aid can be provided in any form, including direct grants.

The framework also requires certain guarantees, in particular:

Appropriate methodology: There should be a link between the amount of aid that can be granted to undertakings and the scope of their economic activity and how undertakings are exposed to the economic impacts of the crisis, considering their turnover and energy costs.

Eligibility conditions: The definition of energy-intensive users is determined by reference to Article 17(1)(a) of the Energy Taxation Directive, i.e. undertakings whose purchases of energy products account for at least 3 % of the value of production.

Undertakings in the category of companies in financial difficulty will also be able to benefit from the measures, as they too may face an urgent need for liquidity given the present circumstances in the immediate aftermath of the coronavirus pandemic. Russian-controlled entities subject to sanctions will be excluded from the scope of these measures.

The Temporary Crisis Framework will remain in force until 31 December 2022. However, before this date, the Commission will assess whether it needs to be extended in the interest of legal certainty. In addition, during this period, the Commission will adjust the content and scope of the framework to developments in energy markets, markets for other inputs and the wider economic situation.

The full text of the press release: State aid: Commission adopts Temporary Crisis Framework to support the economy in context of Russia's invasion of Ukraine is available here  

Press Unit of the Office
22/051

 

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