European Commission approves €2 billion Slovak employment aid scheme to preserve jobs and support the self-employed during the coronavirus outbreak
The European Commission has approved a €2 billion Slovak aid scheme for preserving employment and supporting self-employed individuals affected by the coronavirus outbreak and the emergency measures taken by the State. The scheme was approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April 2020.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The compensation of thousands of employers and self-employed persons during the state of emergency declared in Slovakia following the coronavirus outbreak will help those affected by the crisis to overcome these difficult times. The €2 billion Slovak employment aid scheme complies with our Temporary Framework to enable Member States to grant State aid to remedy the economic impact of the pandemic.”
The Slovak support measure
Slovakia notified to the Commission under the Temporary Framework a wage subsidy aid scheme that would allow the Slovak authorities to financea part of the wage costs (including employer’s social security contributions) of undertakings that, due to the coronavirus outbreak, would otherwise have laid off personnel. The compensation will benefit employers that will preserve jobs despite the obligation to cease or reduce economic activities based on the emergency state measures. The scheme would also allow the Slovak authorities to compensate self-employed persons and employers affected by lower revenues due to the crisis or by the imposed restrictions of their operations.
The measure is expected to support the jobs of close to 400,000 employees and 300,000 self-employed persons. Support will be granted to employers affected by the emergency state measures, to cover a part of their wage costs and their social security contributions, and to the self-employed and employers affected by lower revenues to partly compensate their reduced revenues.
The Commission found that the Slovak scheme is in line with the Temporary Framework. In particular, the measure will compensate the wage costs of undertakings affected by the coronavirus outbreak, provided that (i) they commit to maintain in continuous employment personnel that would otherwise have been laid off, and(ii) the aid intensity complies with the maximum 80% allowed by the Temporary Framework. As regards self-employed individuals and employers affected by lower revenues due to the crisis or by the imposed restrictions of their operations, the total amount of aid may not exceed €100,000 per undertaking active in the primary agricultural production, €120,000 per undertaking active in the fishery and aquaculture sector and €800,000 per undertaking in other sectors. Lastly, the aid scheme respects the maximum duration of twelve months.
The Commission therefore concluded that this 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 measures under EU State aid rules.