European Commission approves €12 billion German umbrella scheme to compensate companies for damages suffered due to coronavirus outbreak

The European Commission has found a €12 billion German umbrella scheme (final part of the Novemberhilfe package) to compensate companies for damages suffered due to restrictive measures to contain the coronavirus outbreak to be in line with EU State aid rules.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The second wave of the coronavirus has hit many businesses very hard. This €12 billion scheme will enable Germany to compensate businesses of all sectors for the damages suffered due to restrictive measures taken to contain the coronavirus outbreak. It complements already approved schemes enabling support of up to €4 million per company as part of the Novemberhilfe package. We continue to work closely with Member States to find effective solutions to support companies in these difficult times, in line with EU rules.”

Under the scheme, companies from all sectors will be entitled to compensation for damages suffered during the lockdown periods imposed by the German government in March/April and November/December 2020 to limit the spread of the coronavirus. The compensation, in the form of direct grants, covers either up to 100% of the actual damage incurred during the lockdown periods, or 75 % of the turnover in the reference months of November and December 2019, whichever amount is lower.

The Commission assessed the measure under 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 by Member States to compensate specific companies or sectors (in the form of schemes) for damage directly caused by exceptional occurrences.

The Commission considers that the coronavirus outbreak qualifies as such 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 directly linked to the outbreak are justified.

The Commission found that the German aid scheme will compensate damages that are directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the envisaged compensation does not exceed what is necessary to make good the damage.

The Commission therefore concluded that the scheme is in line with EU State aid rules.

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