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What's New in State Aid

Temporary Framework

The Commission published a Temporary framework for State aid in December 2008 in response to the financial crisis. It is due to end on 31 December 2010 and no aid can be offered using the more relaxed rules after this date. The Temporary Framework offers more flexibility in the normal state aid rules to help Member States respond to the crisis. These support measures can be given to companies who may now be experiencing difficulties but were in a viable position on 1 July 2008. This means that companies in difficulty can be helped on a temporary basis without having to be put through the extremely rigorous procedure involved in rescue and restructuring aid.

The main changes involve: 

  • The possibility to give grants of up to 500,000 euros per company as long as this is done as part of a scheme.

  • The possibility to increase slightly the subsidy element in a loan.

  • Loan guarantees can be given for up to 90% of the loan instead of the normal 80%. However the underlying loan must be for no more than the company’s wage bill.

  • Loans can be given to companies promising to make products which go beyond European environmental specifications or meet such specifications early.

The European Commission has approved a number of UK notifications (see below) under the Temporary Framework. These UK wide measures mirror the conditions of the Temporary Framework: