EU publishes 4th amendment to Temporary Framework for state aid to corporations re COVID

(Lexology, London, 14 October 2020) The EU Commission has published a 4th amendment to its 19 March 2020 guidance document on state aid in reaction to the COVID-19 outbreak (see our blog post). Article 107(1) of the TFEU contains a general prohibition of aid granted by a Member State or through State resources which distorts competition and trade within the EU by favouring certain companies or the production of certain goods. The Temporary Framework was previously amended on 3 April 2020 (see our blog post), on 8 May 2020 (see our blog post) and on 29 June 2020 (see our blog post).The 4th amendment extends the availability of all the measures set out in the Temporary Framework and it introduces an extension of the temporary removal of all countries from the list of “marketable risk" countries under the Short-term export-credit insurance Communication (STEC). As a consequence of the COVID-19 outbreak, the Commission found in March 2020 that there is a lack of sufficient private insurance capacity for short-term export-credits in general and considered all commercial and political risks associated with exports to the countries listed in the Annex to STEC as temporarily non-marketable until 31 December 2020. TFX further reports that "certain governments have used ECAs as vehicles to help corporates better deal with the crisis, and some of the amounts involved have been substantial. For instance, a $6.9 billion support package for Fiat Chrysler was guaranteed by Italy’s Sace, an $817 million package for South Korea’s Doosan Heavy industries was backed by Kexim and the Korea Development Bank, and in July UKEF guaranteed £500 million ($642 million) of a £625 million loan from commercial banks for Jaguar LandRover."