European Union: Temporary state aid

Temporary state aid will be available for businesses in the EU member states until the end of 2010.

One of the measures to stimulate economy finding favour with the European Council on 11 to 12 December 2008 was a temporary exemption of two years beyond the de minimis threshold for State aid in respect of an amount of up to EUR 500 000 and the adaptation of the framework, as required to increase support for enterprises, especially SMEs, and full implementation of the action plan for a Small Business Act adopted by the Council on 1 December 2008.

Source: Presidency Conclusions 11 to 12 December 2008 (Council document 17271/08)

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The Commissission has released additional information of interest to member states’ governments and to businesses, including small and medium sized enterprises (SMEs).


Quick view


The Commission has presented an overview of the temporary aid measures in a press release.


State aid: Commission adopts temporary framework for Member States to tackle effects of credit squeeze on real economy (17 December 2008, IP/08/1993):

http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/795&format=HTML&aged=0&language=EN&guiLanguage=en

Under these temporary measures, Member States may grant, under certain conditions and until the end of 2010 e.g.:

- a lump sum of aid up to €500,000 per company for the next two years, to relieve them from current difficulties

- state guarantees for loans at a reduced premium

- subsidised loans, in particular for the production of green products (meeting environmental protection standards early or going beyond such standards)

- risk capital aid up to € 2.5 million per SME per year (instead of the current €1.5 million) in cases where at least 30% (instead of the current 50%) of the investment cost comes from private investors.


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Detailed framework

More detail is found in the Communication from the Commission: Temporary framework for State aid measures to support access to finance in the current financial and economic crisis (17 pages). At this point in time, the Communication is available only in English, from here:

http://ec.europa.eu/competition/state_aid/legislation/temp_framework_en.pdf


After describing the background, the Commission reminds the readers of existing state aid instruments at the disposal of member states, such as the revised de minimis Regulation (published OJ 28.12.2006 L 379) and the General Block Exemption Regulation (GBER; OJ 9.8.2008 L 241) as well as the new Community guidelines on state aid for environmental protection (OJ 1.4.2008 C 82).

The Commission then moves on to describe the existing framework and the details of new measures, which will be available on a temporary basis.

Although the credit squeeze is an acute problem for many companies, especially small and medium sized enterprises, DG Competition tries to emphasise forward looking aid instruments compatible with the Lisbon Strategy for Growth and Jobs.

The Commission invites the member states’ governments to inform the Commission of their intentions and notify plans to introduce aid measures as early and comprehensively as possible.


Ralf Grahn