European Commission approves a Polish scheme to compensate large companies for damages suffered due to coronavirus outbreak and provide liquidity support

The European Commission has approved, under EU State aid rules, a Polish scheme to partially compensate large companies for the damages suffered due to the coronavirus outbreak and the restrictive measures implemented by the Polish government, while providing them with direct liquidity support through subsidised loans. The scheme is part of a wider Polish support programme, the so-called “Financial Shield for Large Enterprises”.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This scheme will enable Poland to partially compensate large companies for the damages suffered as a result of the restrictive measures put in place to limit the spread of a third wave of the coronavirus pandemic, while supporting their immediate liquidity needs. We continue working in close cooperation with Member States to find workable solutions to mitigate the economic impact of the coronavirus outbreak, in line with EU rules.”

The Polish scheme

Poland notified to the Commission a scheme to compensate large companies for the damages caused by the coronavirus outbreak and to support their immediate liquidity needs.

The scheme, which is modelled upon a previous Polish scheme approved by Commission on 29 May 2020 (SA.57054), will be implemented by the Polish Development Fund and is part of a wider Polish programme, called “Financial Shield for Large Enterprises”, supporting companies in the context of the coronavirus outbreak.

Under the scheme, which will be open to large companies active in all sectors and registered in Poland, the aid will take the form of subsidised loans at favourable interest rates, which can be redeemed in an amount not exceeding 75% of the actual damages incurred by the beneficiary companies from 1 November 2020 until 30 April 2021 and directly due to the coronavirus outbreak.

Beneficiaries of the aid will therefore have access to immediate liquidity, through loans. The aid is planned to be granted in the form of loans to be partially written-off later by an amount equivalent to the calculated damages suffered due to the coronavirus outbreak.

The Commission assessed the Polish scheme, which provides for both compensation for damages and liquidity support, under two legal bases:

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 to compensate specific companies or specific sectors for the damages directly caused by exceptional occurrences, and
under Article 107(3)(b) TFEU, which enables the Commission to approve State aid measures implemented by Member States to remedy a serious disturbance in their economy.
The Commission considers that the coronavirus outbreak qualifies as an exceptional occurrence, as it is an extraordinary, unforeseeable event having a significant economic impact. As a result, exceptional interventions by the Member States to compensate for the damages linked to the outbreak are justified.

The Commission found that the Polish measure will compensate damages that are directly linked to the coronavirus outbreak, and that it is proportionate, as the compensation will not exceed what is necessary to make good the damage, in line with Article 107(2)(b) TFEU.

Furthermore, the Commission found that the liquidity support measure is in line with the conditions laid down in Article 107(3)(b) TFEU and in the Temporary Framework. In particular, (i) the loan contracts will be signed by 31 December 2021 at the latest; (ii) they will be limited to a maximum of six years and (iii) the maximum loan amount per beneficiary does not exceed the limits set out in the Temporary Framework. 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.

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

 

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