Temporary EU State Aid Framework includes short term export credits

(Mondaq, London, 6 April 2020) On 19 March 2020, the European Commission adopted a Temporary Framework to enable EU Member States to use European State aid rules to support the European economy in the COVID-19 crisis. The first programs have already been approved in Denmark, Germany, France, Italy and Portugal. The Temporary Framework, based on Article 107(3)(b) of the of the Treaty on the Functioning of the European Union (TFEU), recognizes that the entire EU economy is experiencing a serious disturbance. To remedy that, the Temporary Framework provides five types of aid that can be granted by EU Member States ranging from direct grants, subsidized and/or state guaranteed loans and short term export credits. Given the limited size of the EU budget, the main response will come from Member States' national budgets. The Temporary Framework will help target support to the economy, while limiting negative consequences to level the playing field in the Single Market.