The European Commission has approved a €10 million Slovak scheme to support agricultural product processors and the food production sector 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, said: “Russia's unjustified war against Ukraine continues, with its heavy impact on many sectors of the economy, including on food producers. This €10 million scheme approved today will enable Slovakia to support these companies, providing them with the necessary liquidity they need to continue their activities. 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 Slovak measure
Slovakia notified to the Commission a €10 million scheme to support companies in the context of Russia's war against Ukraine.
The measure will be open to companies of all sizes and active in the sectors of processing of agricultural products and/or food production.
Under the scheme, the eligible beneficiaries will be entitled to receive limited amounts of aid in the form of direct grants.
The Commission found that the Slovak 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 beneficiary; and (ii) will be granted no later than 31 December 2022.
The Commission concluded that the Slovak 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.
Background
The State aid Temporary Crisis Framework, adopted on 23 March 2022, enables Member States to use the flexibility foreseen under State aid rules to support the economy in the context of Russia's war against Ukraine.
The Temporary Crisis Framework has been amended on 20 July 2022, to complement the Winter Preparedness Package and in line with the REPowerEU Plan objectives.
The Temporary Crisis Framework provides for the following types of aid, which can be granted by Member States:
The following types of aid are also possible on a case-by-case basis, subject to conditions: (i) support for companies affected by mandatory or voluntary gas curtailment, (ii) support for the filling of gas storages, (iii) transitory and time-limited support for fuel switching to more polluting fossil fuels subject to energy efficiency efforts and to avoiding lock-in effects, and (iv) support the provision of insurance or reinsurance to companies transporting goods to and from Ukraine.
Sanctioned Russian-controlled entities will be excluded from the scope of these measures.
The Temporary Crisis Framework includes a number of safeguards:
The Temporary Crisis Framework will be in place until 31 December 2022 for the liquidity support measures and measures covering increased energy costs. Aid supporting the roll-out of renewables and the decarbonisation of the industry may be granted until end June 2023.
The Commission is continuously monitoring the application of the State aid Temporary Crisis Framework to take account of the evolving situation. This is why, on 5 October 2022, the Commission sent to Member States for consultation a draft proposal to prolong and adjust the State aid Temporary Crisis Framework, including in the light of the Commission's proposal on an emergency market intervention, on which a political agreement has been reached in Council on 30 September 2022. Member States now have the possibility to comment on the Commission's draft proposal.
The Temporary Crisis Framework complements the ample possibilities for Member States to design measures in line with existing EU State aid rules. For example, EU State aid rules enable Member States to help companies cope with liquidity shortages and needing urgent rescue aid. Furthermore, Article 107(2)(b) of the Treaty on the Functioning of the European Union enables Member States to compensate companies for the damage directly caused by an exceptional occurrence, such as those caused by the current crisis.
Furthermore, on 19 March 2020, the Commission adopted a Temporary Framework in the context of the coronavirus outbreak. The COVID Temporary Framework was amended on 3 April, 8 May, 29 June, 13 October 2020, 28 January and 18 November 2021. As announced in May 2022, the COVID Temporary Framework has not been extended beyond the set expiry date of 30 June 2022, with some exceptions. In particular, investment and solvency support measures may still be put in place until 31 December 2022 and 31 December 2023 respectively. In addition, the COVID Temporary Framework already provides for a flexible transition, under clear safeguards, in particular for the conversion and restructuring options of debt instruments, such as loans and guarantees, into other forms of aid, such as direct grants, until 30 June 2023.
The non-confidential version of the decision will be made available under the case number SA.104395 in the State aid register on the Commission's competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.
More information on the Temporary Crisis Framework and other actions taken by the Commission to address the economic impact of Russia's war against Ukraine can be found here.