EC extends Temporary Framework to further support the economy in the current COVID-19 outbreak

On 3 April 2020, the European Commission adopted an amendment to the Temporary Framework to enable Member States to accelerate the research, testing and production of coronavirus relevant products, to protect jobs and to further support the economy in the context of the COVID-19 outbreak (the ‘Amendment’).

The Amendment complements the State aid measures previously defined by the European Commission as compatible with the internal market within the Temporary Framework. In particular, it provides for the following additional measures that Member States may adopt:

1. Support for coronavirus related research and development (R&D): Member State may grant aid in the form of direct grants, repayable advances or tax advantages for coronavirus and other relevant antiviral R&D.
2. Support for the construction and upscaling of testing facilities: Member States may grant aid in the form of direct grants, tax advantages, repayable advances and no-loss guarantees to support investments enabling the construction or upscaling of infrastructures needed to develop and test products useful to tackle the coronavirus outbreak, up to first industrial deployment. These include medicinal products (including vaccines) and treatments; medical devices and equipment (including ventilators and protective clothing, as well as diagnostic tools); disinfectants; data collection and processing tools useful to fight the spread of the virus.
3. Support for the production of products relevant to tackle the coronavirus outbreak: Member States may grant aid in the form of direct grants, tax advantages, repayable advances and no-loss guarantees to support investments enabling the rapid production of coronavirus-relevant products.
4. Targeted support in the form of deferral of tax payments and/or suspensions of social security contributions: Member States may grant targeted deferrals of payment of taxes and of social security contributions in those sectors, regions or for types of companies that are hit the hardest by the outbreak with a view to further reduce the liquidity constraints on companies due to the COVID-19 crisis and to preserve employment.
5. Targeted support in the form of wage subsidies for employees: Member States may contribute to the wage costs of those companies in sectors or regions that have suffered most from the coronavirus outbreak, and would otherwise have had to lay off personnel.

The Amendment shall be in place until the end of December 2020, however the European Commission shall assess, prior to the said date, whether the Amendment is to be extended further.

Member States remain obliged to notify the European Commission of qualifying measures to be introduced by Member States in relation to COVID-19.

The full text of the Amendment can be found here.