State aid: Commission approves €700 million Italian scheme to support companies in context of Russia's war against Ukraine
The European Commission has approved a €700 million Italian scheme to support companies in the context of Russia's war against Ukraine. The scheme was approved under the State aid Temporary Crisis Framework, adopted by the Commission on 23 March 2022 and amended on 20 July 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, recently said:
“With this €700 million scheme, Italy will ensure that sufficient liquidity remains available to companies affected by the current geopolitical crisis and the related sanctions, allowing them to continue their economic activity in this difficult context. 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 Italian measure
Italy notified to the Commission a €700 million scheme to support companies in the context of Russia's war against Ukraine.
The measure will be open to small and medium-sized enterprises (‘SMEs') and MidCap companies (entities having less than 1,500 employees) active in all sectors that are affected by the current geopolitical crisis and the subsequent sanctions and countersanctions.
Companies active in primary production of agricultural products, fishery, aquaculture, banking and financial sectors as well as commercial intermediation and trading companies are however excluded.
Under the scheme, eligible beneficiaries will be entitled to receive limited amounts of aid in the form of direct grants.
The scheme will be open to companies having a total average foreign turnover, during the years 2019, 2020, and 2021, of at least 10% of their total average turnover for the same years.
In order to be eligible, companies must also count Ukraine, Russia or Belarus as suppliers for certain portions of their total supplies and foresee, for fiscal year 2022, either (i) an increase in the average unit cost of supplies; or (ii) a reduction in quantities of supplies from the same countries of at least 20%, compared to the average registered in 2019, 2020 and 2021.
The Commission found that the Italian scheme is in line with the conditions set out in the Temporary Crisis Framework. In particular, the aid (i) will not exceed €500,000 per company; and (ii) will be granted no later than 31 December 2022.
The Commission concluded that the Italian 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.
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