The European Commission Proposes to Extend the Temporary Framework on State Aid until June 2021

The European Commission (EC) has proposed to the Member States to extend until 30 June 2021 and adapt the Temporary Framework on State Aid, adopted on 19 March 2020 to support the economy in the context of the Covid-19 pandemic, Mediafax reports.

According to an EC Communication, the Commission has sent to the Member States for consultation a draft proposal aimed at extending the provisions of the Temporary Framework while maintaining the current limits for an additional period of six months, until 30 June 2021.

“The aim is to enable Member States to support businesses in the context of the crisis caused by the COVID-19 pandemic, especially in cases where the need or capacity to use the Temporary Framework has not fully materialized so far, while ensuring conditions for fair competition “, the communique reads.

The EC has also proposed extending the scope of the Temporary Framework, taking into account persistent economic uncertainty and the needs of companies with significant losses in turnover, giving Member States the opportunity to contribute to the fixed costs of companies not covered by recorded income.

The temporary framework, adopted in March 2020, is now valid until 31 December.

“Over the last seven months, the Temporary Framework on State Aid has paved the way for potential support from Member States of almost € 3 trillion for the companies most affected by the COVID-19 pandemic crisis. The effects of the crisis will be felt for a while. That is why we are proposing to extend the Temporary Framework until the middle of next year and adapt it to the continuing needs of businesses, while protecting the EU’s single market. We will decide on the way forward, taking into account the views of all Member States, “said Margrethe Vestager, Executive Vice President for Competition Policy.

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