Commission approves €1.24 billion Italian scheme to support companies hiring young workers in the context of the coronavirus outbreak

The European Commission has approved a €1.24 billion Italian scheme to support companies hiring young workforce in the context of the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Young workers in particular are facing difficulties in finding job with open-end contracts. This Italian €1.24 billion scheme will support labour and help companies offering them stable employment. We continue working in close cooperation with Member States to mitigate the impact of the coronavirus outbreak, in line with EU rules”.

The Italian support measures

Italy notified to the Commission under the Temporary Framework a €1.24 billion aid scheme to support companies hiring young workers in the context of the coronavirus outbreak.

The aim of the scheme is to reduce the labour costs of the beneficiaries, thereby helping them address their liquidity needs and promote employment of young people in this difficult moment.

Under the scheme, the aid will take the form of an exemption from payment of social security contributions for new open-ended employment contracts – or transformations of fixed-term contracts into open-ended contracts – concluded in 2021 with workers under 36 years of age.

The exemption will apply for a period of 38 months and up to a maximum annual amount of €6,000 per employee. The exemption period can be extended to 48 months, if the hiring/transformation of contract concerns an employee working in certain southern regions of Italy.

In order to be eligible, employers must not have dismissed employees during the 6 months preceding the recruitment/transformation of the contract or during the following 9 months.

The Commission found that the Italian scheme is in line with the conditions set out in the Temporary Framework. In particular, the aid (i) will not exceed €225,000 per company active in the primary production sector of agricultural products, €270,000 per company active in the fisheries and aquaculture sector and €1.8 million per company active in all other sectors; and (ii) will be granted no later than 31 December 2021.

The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework.

On this basis, the Commission approved the aid measure under EU State aid rules.

 

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