The Union has extended the temporary framework for state aid

The European Commission (EC) decided to extend the temporary framework for state aid until 31 December 2021. The aim of the March 2020 legal framework is to support the economies of EU member states after the effects of the corona crisis. The Commission stated that it had decided to extend the scope of this framework by increasing the financial ceilings covered and allowing certain repayable instruments to be converted into direct grants by the end of next year. Margrethe Vestager, EC's Executive Vice-President for Competition Policy, said the new coronavirus pandemic was lasting longer than expected and that the European Commission wanted to ensure that Member States could continue to provide the necessary support to businesses to overcome it. "Today, we have extended the application of the temporary framework until the end of the year. This will allow Member States to make full use of the flexibility of state aid rules to support their economies," she said. The temporary legal framework was due to expire on 30 June 2021, with the exception of recapitalization measures, which could be taken until 30 September 2021. As the pandemic continues, the amendment extends all measures set out in the temporary framework, including recapitalization measures until 31 December 2021. The notified change increases the ceilings set in the temporary framework for certain support measures. Previous ceilings per enterprise have basically doubled. The new ceilings are € 225,000 per primary agricultural enterprise (so far € 100,000), € 270,000 per fisheries and aquaculture business (€ 120,000) and € 1.8 million for businesses in other sectors (previously € 800,000). As in the past, these resources can be combined with de minimis aid of up to EUR 200,000 per enterprise, up to EUR 30,000 per fisheries and aquaculture enterprise, and up to EUR 25,000 per agricultural sector, for three accounting periods. In the case of companies which have been particularly affected by the pandemic and have lost at least 30% of their turnover during the eligible period in 2019, the State may contribute to part of the fixed costs of enterprises not covered by their income, up to EUR 10 million per one company (previously three million euros). The Commission will also allow Member States to convert, by 31 December 2022, repayable instruments (guarantees, loans, repayable advances) provided under the temporary legal framework into forms of aid other than direct grants. This conversion must not, in principle, exceed the new ceilings for limited amounts of aid. The aim is to provide incentives for Member States to resort to repayable instruments as a matter of priority when providing assistance. In view of the persistent lack of private capacity to cover all economically justified export risks to countries on the list of countries with tradable risk, the amendment also provides for an extension of the temporary exclusion of all countries from the list of countries with "tradable risk" under the short - term export credit insurance notice until 31 December 2021. So far it was until June 30, 2021.