European Commission approves €1.4 billion Swedish scheme to support uncovered fixed costs of companies affected by coronavirus outbreak
The European Commission has approved an approximately €1.4 billion (SEK 14 billion) Swedish scheme to support the uncovered fixed costs of companies affected by the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Swedish companies have experienced a significant decline in their revenues because of the restrictive measures put in place to limit the spread of the coronavirus. This €1.4 billion scheme will enable Sweden to support companies affected by the coronavirus outbreak, by helping them cover their fixed costs that are not covered by their revenues. 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 Swedish support measure
Sweden notified to the Commission an approximately €1.4 billion (SEK 14 billion) scheme to further support companies affected by the coronavirus outbreak under the Temporary Framework.
Under the scheme, the public support will take the form of direct grants. The scheme will be open to companies active in all sectors except the financial sector. The scheme covers three eligible periods: (i) August–October 2020, (ii) November–December 2020, and (iii) January–February 2021. The aid will be granted to companies that suffered a turnover decline exceeding 40% in the period August-October 2020 or 30% in each of the periods November-December 2020 and January-February 2021, compared to the same periods in 2019. The beneficiaries will receive grants covering up to 70% of their uncovered fixed costs during the eligible periods. In the case of micro and small enterprises, the grants will cover up to 75% of the uncovered fixed costs with regard to the period August-October 2020, or 90% in the other periods.
The purpose of the scheme is to mitigate the economic difficulties and the sudden liquidity shortages that the beneficiaries are facing due to the restrictive measures imposed by the Swedish government to limit the spread of the coronavirus.
The Commission found that the Swedish scheme is in line with the conditions set out in the Temporary Framework. In particular, the aid (i) will not exceed €10 million per company; (ii) will cover uncovered fixed costs incurred during a period comprised between 1 March 2020 and 31 December 2021; and (iii) will be granted before 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 measure under EU State aid rules.