WIREDGOV

The European Commission has approved the amendments to existing German umbrella schemes, including their prolongation and an up to €45 billion overall budget increase, to support companies in the context of Russia's war against Ukraine. The amendments were approved under the State Aid Temporary Crisis Framework, adopted by the Commission on 23 March 2022 and amended on 20 July 2022 and on 28 October 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.

The German measure

The Commission has approved, under the Temporary Crisis Framework, the amendments to existing German umbrella schemes, including their prolongation and an up to €45 billion overall budget increase, to support companies in the context of Russia's war against Ukraine.

The existing schemes are: (i) an umbrella scheme (i.e. a scheme administered by federal, regional and local authorities) approved by the Commission on 19 April 2022 (SA.102542); and (ii) an umbrella scheme under which the aid takes the form of guarantees on loans (‘guarantee scheme') and subsidised loans (‘subsidised loan scheme'), that the Commission approved on 4 May 2022 (SA.102631). Both schemes have been amended on 18 August 2022 (SA.104019).

Germany notified, among others, the following modifications of the existing schemes:  (i) an extension of the period in relation to which aid may be granted, until 31 December 2023; and (ii) the introduction of the possibility to convert debt instruments, such as loans and guarantees, into other forms of aid, such as direct grants.

When it comes to limited amounts of aid in particular, Germany notified (i) an increase of the maximum aid ceilings, in line with the Temporary Crisis Framework as amended, resulting in an overall budget increase by up to €45 billion; and (ii) the introduction of the possibility to channel the aid through an energy supplier.

For the guarantee scheme, the amendments aim at introducing the following options: (i) public guarantees may exceptionally cover bank guarantees; and (ii) large companies may obtain guarantees to cover their liquidity needs derived from trading activities on energy markets for a 12-month period following the granting of the aid. In both cases, these new options may only be put in place when the guarantees are aimed at addressing the liquidity needs arising from collateral requirements on trading activities on energy markets.

Lastly, for the subsidised loan scheme, the amendments aim at adjusting the base rate applicable for the calculation of the reduced interest rates.

The Commission found that the German schemes, as modified, remain 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 as amended on 28 October 2022.

Furthermore, the public support will come subject to conditions to limit undue distortions of competition, in particular between suppliers, and safeguards to ensure that limited amounts of aid are passed on to the final beneficiary when channelled through an energy supplier.

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

Click here for the full press release