The EU has loosened restrictions on state aid to companies in order to incentivise collaboration and speed on developing solutions to the Corona crisis.
The European Commission (EC) has set out a loosened regulatory framework allowing Member States (MS) to increase support for Coronavirus-related research and development, as well as to support jobs and SMEs during the current crisis. Under normal circumstances, state aid restrictions serve to ensure a level playing field of competition within the single market and avoid harmful subsidy races. However, the current circumstances have led the EC to encourage such support when targeted and in particular when conducted through collaboration between MS.
The latest amendments allow further flexibility for MS in support for coronavirus-related research and development, construction and upscaling of testing facilities, for production of products directly relevant to addressing the outbreak, and for targeted support to companies and employees allowing them to weather the crisis.
They also include added incentives. In order to encourage cooperation and speed up action, research organisations can benefit from a bonus if their projects are carried out in a cross-border collaboration or if the research project is supported by more than one MS. Likewise, companies looking to fund testing infrastructures or production can benefit from a bonus if their investment is supported by more than one MS or if the investment is concluded within two months after the granting of the aid.
The amendment includes a number of safeguards. For example, it links aid for the production of coronavirus-relevant products and equipment to a very rapid implementation of the subsidised projects. Aid for coronavirus relevant R&D can only be granted, if beneficiaries commit to grant non-exclusive licences under non-discriminatory market conditions to third parties in the European Economic Area.
The temporary framework complements broader possibilities for MS to mitigate the economic impact of the current crisis, and will be in place until the end of December 2020. The EC has approved a number of broader MS economic support measures under this framework, as well as more targeted R&D-focused schemes, as in the case of Germany, Belgium, Portugal, Malta, and Luxembourg.