The European Commission has approved a German scheme to support companies active in all sectors in the context of Russia’s invasion of Ukraine. The scheme, which may reach up to €20 billion, was approved under the Temporary Crisis Framework for State Aid adopted by the Commission on 23 March 2022, based on Article 107(3)(b) of the Treaty on the Functioning of the European Union (‘TFEU’), recognising that the EU economy is experiencing a serious disturbance.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said “With this up to €20 billion scheme, Germany will support companies across all sectors affected by the current crisis and the related sanctions. This is an important step to mitigate the economic impact of Putin’s war against Ukraine. We continue to stand with Ukrainians. At the same time, we continue working closely with Member States to ensure that national support measures can be put in place in a timely, coordinated and effective way, while protecting the level playing field in the Single Market.”
Read More: Antitrust Chronicle – State Aid & Antitrust
The measure will be open to companies of all sizes and active in all sectors, with the exception of the financial sector, as the German economy continues to be affected by the current geopolitical crisis and related sanctions.
Under the scheme, the eligible beneficiaries will be entitled to receive limited amounts of aid in any of the following forms: (i) direct grants; (ii) tax or payment advantages; (iii) repayable advances; (iv) guarantees; (v) loans; (vi) equity; and (vii) hybrid financing.
Germany’s economy is heavily reliant on imports of Russian natural gas, as well as other close ties in various industries, from steel to electronics. Disruptions to global supply chains after repeated economic shocks have also increased pressure on businesses across the globe, while depleting the ability of countries to respond through traditional means.
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