COVID-19: State Aid to Counter the Effects of COVID-19 Under the EU Rules

COVID-19: State Aid to Counter the Effects of COVID-19 Under the EU Rules

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Read more in our Coronavirus (COVID-19) Center.

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The COVID-19 crisis is first and foremost a health issue, as governments around the world seek to limit and treat its effects and save lives. However, it is also an immediate economic and social issue, as companies and individuals strive to deal with its effects on their livelihoods—from airlines with no flights and passengers to small businesses which have to close for lack of cashflow and increased costs or due to governmental social distancing measures.

As a result, parallel to quarantine and travel restrictions, EU Member States are announcing State subsidy packages of huge scope daily. In the European Union, such subsidies (termed ‘aid’) are generally regulated in order to prevent unfair distortions of competition and trade within the EU’s Internal Market. To deal with this, on 13 March 2020 the European Commission (the ‘EC’) issued a “Communication” recalling the various options for Member States that are within the rules.1 On 19 March 2020, it adopted a further, specific “Temporary Framework” for support measures to help with the effects of COVID-19, after consultation with the 27 EU Member States.2

This Alert aims to offer a high-level overview of key EU State aid issues relating to the COVID-19 outbreak, based on these measures.

WilmerHale has formed a Coronavirus (COVID-19) Task Force to lead the legal and strategic counselling of clients around the world in response to the outbreak. The task force consists of WilmerHale lawyers in multiple key disciplines. The Crisis Management and Strategic Response Group is also involved in helping clients respond to these challenges.

WilmerHale’s European Antitrust and Competition team is closely following these issues. The lawyers listed below would be happy to answer any follow-up questions that readers may have.

Read the full alert.

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