Northern Ireland companies can seek State Aid during the COVID-19 outbreak
Recent news reports have detailed the difficulties many companies are experiencing in response to the COVID-19 outbreak. Whilst the NI Finance Minister and the Chancellor have promised a raft of measures to assist companies – the logistics of which are still unclear.
A welcome development has come from the European Commission in respect of State Aid rules. During the UK's transitional period in leaving the EU – it is still subject to these rules. Yesterday the Commission set out its proposals for a Temporary Framework to support the European economy at this time. Vice-President Margrethe Vestager has stated that the priority is ensuring "businesses have the liquidity to keep operating".
The new Temporary Framework will enable Member States to:
- set up schemes direct grants (or tax advantages) up to €500,000 to a company
- give subsidised State guarantees on bank loans
- enable public and private loans with subsidised interest rates
- in recognition of the important role of the banking sector to deal with the economic effects of the COVID-19 outbreak, namely to channel aid to final customers, in particular small and medium-sized enterprises. Such aid as direct aid can be provided to the banks' customer. Guidance is to be provided on how banks can do this in line with EU rules
Whilst this will undoubtedly come as welcome news to many companies they will still require assistance in ensuring they access under the appropriate scheme and follow the relevant rules on how the aid is used.
A&L Goodbody has extensive experience in advising companies which apply for State Aid compliant assistance. Should any companies wish to discuss how they should do so please contact Micaela Diver, Partner Competition & Procurement, Stephen Abram, Associate Competition & Procurement or any member of A&L Goodbody's Belfast EU, Competition & Procurement team.
Date published: 18 March 2020