European Commission approves €20 billion German scheme to support companies in context of Russia’s invasion of Ukraine

The European Commission has approved an up to €20 billion German scheme to support companies active in all 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: “With this up to €20 billion scheme, Germany will support companies across all sectors affected by the current crisis and the related sanctions. This is an important step to mitigate the economic impact of Putin’s war against Ukraine. We continue to stand with Ukrainians. 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 German measure

Germany notified to the Commission an up to €20 billion scheme to support companies in the context of Russia’s invasion of Ukraine.

The measure will be open to companies of all sizes and active in all sectors, with the exception of the financial one, which are affected by the current geopolitical crisis and the related sanctions.

Under the scheme, the eligible beneficiaries will be entitled to receive limited amounts of aid in any of the following forms: (i) direct grants; (ii) tax or payment advantages; (iii) repayable advances; (iv) guarantees; (v) loans; (vi) equity; and (vii) hybrid financing.

The Commission’s assessment

The Commission found that the German scheme is in line with the conditions set out in the Temporary Crisis Framework. In particular, the aid (i) will not exceed €35,000 per beneficiary active in the primary production of agricultural products, fisheries and aquaculture sectors and €400,000 per company active in all other sectors; and (ii) will be granted no later than 31 December 2022.

The Commission concluded that the German 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.