EU Commission announcement: State Aid rules & measures to address COVID-19 economic impact

In a statement issued earlier today the EU Commission highlighted that EU State aid rules enable Member States to take action to support citizens and businesses, in particular SMEs, who are facing economic difficulties due to the COVID-19 outbreak.

Measures which are compatible with State Aid rules:

Examples of support to businesses: wage subsidies, suspension of payments of corporate taxes, VAT  or social security contributions, as well as compensation for the damage directly caused by exceptional occurrences, including measures in sectors such as aviation and tourism (pursuant to article 107(2)(b) TFEU, which recognises aid to make good the damage caused by natural disasters or exceptional occurrences as being compatible with the Internal Market).

Examples of support to consumers: financial support for cancelled services or tickets that are not reimbursed by the operators concerned.

Furthermore, pursuant to article 107(3)(b) TFEU, the Commission may approve aid measures to remedy a serious disturbance in the economy of a Member State. To date, the scale of the outbreak in Italy is such that allows the application of this provision. The Commission will be assessing the use of Article 107(3)b for other Member States and is preparing a special legal framework under Article 107(3)(b) TFEU which may be adopted if the need arises.


The Commission has also announced that it will propose to the Council to apply the full flexibility provided for in the EU fiscal framework so that the negative socio-economic effects of the outbreak may be mitigated.


The full Commission press release can be viewed at this link.