State aid: Commission approves German aid scheme to support airports affected by the coronavirus outbreak

12 Aug 2020 11:29 AM

The European Commission has approved a German aid scheme to support airports in the context of the coronavirus outbreak. The scheme was approved partially based on Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU) and partially under the State aid Temporary Framework.

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

“Airport operations must be secured to ensure connectivity, mobility and air transport. This scheme will enable German authorities at different levels to compensate German airports for the damage suffered as a result of the coronavirus outbreak. At the same time, it will help them address their liquidity shortages and weather the crisis. During these difficult times, we continue to work with Member States to ensure that national support measures can be put in place as quickly and effectively as possible to tackle the negative effects of the coronavirus outbreak.”

The German support measures

Germany notified to the Commission, based on Article 107(2)(b) TFEU and under the Temporary Framework, a scheme to support airports affected by the coronavirus outbreak.

Under the scheme, which will be open to all operators of German airports, the German authorities at different levels (federal, state and municipal) will be able to:

• Compensate airports for revenue losses directly caused by the coronavirus outbreak during the period 4 March - 30 June 2020, in the form of direct grants. The scheme ensures that any compensation paid out in excess of the actual damage suffered will have to be returned to Germany including interest. The risk of the State aid exceeding the damage is therefore excluded;
• Provide liquidity support in the form of grants, guarantees on loans, subsidised interest rates and deferrals of certain taxes and charges to airports facing liquidity shortages as a result of the restrictions that Germany and other Member States had to impose to limit the spread of the coronavirus. Most liquidity support measures covered by the scheme, with the exception of deferrals of tax and charges, fall under existing schemes previously approved by the Commission under the Temporary Framework (“Bundesregelung Kleinbeihilfen 2020”, “Bundesregelung für niedrigverzinsliche Darlehen 2020” and “Bundesregelung Bürgschaften 2020”). The Commission's assessment in the present case is therefore limited to tax and charges, which are not covered by previously approved schemes.

With respect to the damage compensation, the Commission assessed the measure under Article 107(2)(b) TFEU, which enables the Commission to approve State aid measures granted by Member States to compensate specific companies or specific sectors (in the form of schemes) for the damages directly caused by exceptional occurrences. The Commission considers that the coronavirus outbreak qualifies as an exceptional occurrence, as it is an extraordinary, unforeseeable event having a significant economic impact. As a result, exceptional interventions by the Member States to compensate for the damages linked to the outbreak are justified.

The Commission found that, with respect to the compensation measure, the German aid scheme will compensate damage that is directly linked to the coronavirus outbreak and will provide liquidity to airports in need.  It also found that the measure is proportionate as the compensation does not exceed what is necessary to make good the damage.

With respect to the deferrals of tax and charges, the Commission found that the measure is in line with the conditions of the Temporary Framework. In particular, (i) the measure supports undertakings that are active in a sector which is particularly affected by the coronavirus outbreak; and (ii) the aid will be granted before 31 December 2020 and the end date of the deferrals will be not later than 31 December 2022.

The Commission therefore concluded that the measures are 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 Framework.

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

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