Sat. Sep 24th, 2022

Brussels, 30 June 2022

The European Commission has approved a €140 million Slovenian scheme to support companies across sectors in the context of Russia’s invasion of Ukraine. The scheme was approved under the State aid Temporary Crisis Framework, adopted by the Commission on 23 March 2022, based on Article 107(3)(b) of the Treaty on the Functioning of the European Union (‘TFEU’), recognising that the EU economy is experiencing a serious disturbance.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: 

This €140 million scheme will enable Slovenia to mitigate the economic impact of Putin’s war in Ukraine and to further support companies across sectors affected by the current crisis and the related sanctions. We continue to stand with Ukraine and its people. At the same time, we continue working closely with Member States to ensure that national support measures can be put in place in a timely, coordinated and effective way, while protecting the level playing field in the Single Market.

The Slovenian measure

Slovenia notified to the Commission under the Temporary Crisis Framework a €140 million scheme to support companies across sectors in the context of Russia’s invasion of Ukraine.

Under this measure, which will be administered by the national promotional bank SID Bank, the aid will take the form of (i) limited amounts of aid in the form of loans; (ii) liquidity support in the form of subsidised loans; and (iii) aid in the form of loans for additional costs due to severe increases in natural gas and electricity prices.

The measure will be open to companies across all sectors, with the exception of credit and financial institutions.

The Commission found that the Slovenian scheme is in line with the conditions set out in the Temporary Crisis Framework. In particular, (i) the maturity of the loans cannot exceed eight years; (ii) the interest charges on the loans respect the minimum levels (modulated by an increase reflecting the duration of the guaranteed loans) set out in the Temporary Crisis Framework; and (iii) the loans will be granted by 31 December 2022 at the latest.

As regards the aid for additional costs due to exceptional natural gas and electricity price increases, the conditions of the Temporary Crisis Framework are also fulfilled. In particular, the overall aid per beneficiary cannot exceed 30% of the eligible costs, up to a maximum of €2 million. Energy-intensive users that incur operating losses may receive further aid up to €25 million and, if they are active in particularly affected sectors and sub-sectors, up to €50 million. The overall aid for energy intensive users cannot exceed 50% of the eligible costs and 70% for those active in particularly affected sectors. The overall aid can cover a maximum of 80% of the losses incurred.

The Commission concluded that the Slovenian scheme is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Crisis Framework.

On this basis, the Commission approved the aid measure under EU State aid rules.

Background

On 23 March 2022, the Commission adopted the State aid Temporary Crisis Framework to enable Member States to use the flexibility foreseen under State aid rules to support the economy in the context of Russia’s invasion of Ukraine.

The Temporary Crisis Framework provides for the following types of aid, which can be granted by Member States:

  • Limited amounts of aid, in any form, of up to €35,000 for companies affected by the crisis active in the agriculture, fisheries and aquaculture sectors and of up to €400,000 per company affected by the crisis active in all other sectors;
  • Liquidity support in form of State guarantees and subsidised loans; and
  • Aid to compensate for high energy prices. The aid, which can be granted in any form, will partially compensate companies, in particular intensive energy users, for additional costs due to exceptional gas and electricity price increases. The overall aid per beneficiary cannot exceed 30% of the eligible costs, up to a maximum of €2 million at any given point in time. When the company incurs operating losses, further aid may be necessary to ensure the continuation of an economic activity.  Therefore, for energy-intensive users, the aid intensities are higher and Member States may grant aid exceeding these ceilings, up to €25 million, and for companies active in particularly affected sectors and sub-sectors up to €50 million.

Sanctioned Russian-controlled entities will be excluded from the scope of these measures.

The Temporary Crisis Framework includes a number of safeguards:

  • Proportional methodology, requiring a link between the amount of aid that can be granted to businesses and the scale of their economic activity and exposure to the economic effects of the crisis;
  • Eligibility conditions, for example defining energy intensive users as businesses for which the purchase of energy products amount to at least 3% of their production value; and
  • Sustainability requirements. Member States are invited to consider, in a non-discriminatory way, setting up requirements related to environmental protection or security of supply when granting aid for additional costs due to exceptionally high gas and electricity prices.

The Temporary Crisis Framework will be in place until 31 December 2022. With a view to ensuring legal certainty, the Commission will assess before that date if it needs to be extended. Moreover, during its period of application, the Commission will keep the content and scope of the Framework under review in the light of developments regarding the energy markets, other input markets and the general economic situation.

The Temporary Crisis Framework complements the ample possibilities for Member States to design measures in line with existing EU State aid rules.  For example, EU State aid rules enable Member States to help companies cope with liquidity shortages and needing urgent rescue aid. Furthermore, Article 107(2)(b) of the Treaty on the Functioning of the European Union enables Member States to compensate companies for the damage directly caused by an exceptional occurrence, such as those caused by the current crisis.

Furthermore, on 19 March 2020, the Commission adopted a Temporary Framework in the context of the coronavirus outbreak. The COVID Temporary Framework was amended on 3 April8 May29 June13 October 2020, 28 January and 18 November 2021.

The non-confidential version of the decision will be made available under the case number SA.102841 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.

More information on the Temporary Crisis Framework and other actions taken by the Commission to address the economic impact of Russia’s invasion of Ukraine can be found here.

Source – EU Commision