European Commission approves €500 million Greek aid scheme to support uncovered fixed costs of companies affected by coronavirus outbreak

The European Commission has approved a Greek scheme to support the uncovered fixed costs of companies affected by the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework and has an estimated budget of up to €500 million.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Many companies in Greece have seen their revenues significantly decline because of the coronavirus outbreak and of the measures necessary to limit its spread. This €500 million scheme will enable Greece to support these companies by helping them cover the fixed costs that are not covered by their revenues. We continue to work 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 Greek support measure

Following the approval of several Greek State aid schemes to support companies facing economic difficulties due to the coronavirus outbreak, Greece notified to the Commission a scheme to further support companies under the Temporary Framework.

Under the scheme, Greece plans to provide economic assistance to certain businesses in order to bridge liquidity shortages related to the coronavirus outbreak and thereby to preserve continuity of economic activity during and after the outbreak.

The scheme will be open to all companies, irrespective of their size and of the sector where they operate (with the exception of the financial sector). Under the scheme, support will take the form of a credit to be used for the payment of tax and social security obligations that are due from 1 July 2021 to 31 December 2021. The credit (i) gives the right to the beneficiary to deduct the amount of aid from these obligations towards the State; and (ii) it can be used until 31 December 2021.

The measure will enable the Greek authorities to support companies that suffered from a monthly turnover decline between April 2020 and December 2020 of at least 30% compared to the same period in 2019, by helping them cover the losses incurred during that period. The aid will cover up to 70% (90% in case of micro and small companies) of their fixed costs that are not covered by revenues. The overall aid amount will not exceed €10 million per company.

Furthermore, companies that commenced their activities after 1 January 2019 or established new branches from 1 April 2019 to 31 December 2020, as well as companies providing bus services in Greece (so called KTEL companies), will be eligible for aid under the scheme, up to €225 000 per company active in the primary production of agricultural products, €270 000 per company active in the fishery sector and €1.8 million per company active in all other eligible sectors.

The Commission found that the Greek scheme is in line with the conditions set out in the Temporary Framework. In particular, the aid (i) will not exceed the overall amount of €10 million per company; (ii) will cover uncovered fixed costs incurred during a period comprised between April 2020 and December 2020; (iii) will be granted no later than 31 December 2021; (iv) will be granted only to companies that were not considered to be in difficulty already on 31 December 2019, with the exception of micro and small companies that are eligible even if already in difficulty. For what concerns the aid to newly established undertakings companies and KTEL companies, (i) it will not exceed the overall amount of €225 000 per company active in the primary production of agricultural products, €270 000 per company active in the fishery sector and €1.8 million per company active in all other eligible sectors; and (ii) will be granted no later than 31 December 2021. Finally, Greece will ensure that the rules for cumulation of aid provided under the Temporary Framework are respected across all measures.

The Commission concluded that the measure under the scheme 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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