5 Feb 2021

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Fifth Amendment to the Temporary Framework

The European Commission amended the Temporary Framework for the fifth time on 28 January 2021.

This fifth amendment prolongs until 31 December 2021 the duration of all measures set out in the Temporary Framework, including recapitalisation measures.

National measures impacting the economy being still necessary, the Commission has increased the aid ceilings for certain support measures up to EUR 1.8 million per company. Please note that for companies active in the production of agricultural products the thresholds have been increased to EUR 225 000 and that for those active in the fishery and aquaculture sector aid can now be granted up to EUR 270 000.

Regarding coverage of fixed costs of companies, the State can now contribute for an amount up to  EUR 10 million per company (previously EUR 3 million).

In addition, this fifth amendment seeks to further limit distortions to competition by enabling Member States to convert aid measures granted as repayable instruments into direct grants at a later stage. The new provisions provide incentives for Member States to choose repayable instruments as a primary form of aid and subsequently convert them into direct grants before 31 December 2021.

Last but not least, in Point 15bis, the Commission clarifies the notion of aid compensating damage directly caused by the COVID-19 outbreak and provides examples of the types of measures concerned. Damages resulting from a restrictive measure precluding the beneficiary, de jure or de facto, from operating its economic activity or a specific and severable part of its activity can be compensated under Art. 107(2)(b) TFEU.