The European Commission has announced its approval on 9 March 2021 of a French scheme to support uncovered fixed costs of companies affected by the COVID-19 outbreak.
State aid: Commission approves €2 billion French scheme to support uncovered fixed costs of companies affected by the coronavirus outbreak
The European Commission has approved a French scheme to support the uncovered fixed costs of companies affected by the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "Many French companies have experienced a significant decline in their revenues due to the restrictive measures that France had to put in place to limit the spread of the coronavirus. This €2 billion scheme will enable France to support those companies by helping them cover the fixed costs that are not covered by their revenues. We continue working in close cooperation with Member States to find workable solutions to mitigate the economic impact of the coronavirus outbreak, in line with EU rules."
The French support measure
France notified to the Commission a scheme, with a budget of approximately €2 billion, to further support companies affected by the coronavirus outbreak under the Temporary Framework.
The scheme will be open to all companies, irrespective of their size and of the sector where they operate (with the exception of the financial sector). The public support will take the form of direct grants. The measure will enable the French authorities to support companies that suffered a monthly turnover decline between January 2021 and November 2021 of at least 30% compared to the same period prior to the coronavirus outbreak (January 2019 – November 2019), by helping them cover the losses incurred during that period.
The amount of aid that each beneficiary will be eligible to receive will be calculated on the basis of the so-called excédent brut d'exploitation (EBE), a financial figure included in a company's monthly accounts which reflects its uncovered fixed costs. The EBE will have to be verified by certified accountants before submitting the application for aid. The aid will help the beneficiaries pay 70% (90% in case of micro and small companies) of their fixed costs that are not covered by revenues, up to a maximum of €10 million per undertaking.
The purpose of the scheme is to mitigate the economic difficulties and the liquidity shortages that the beneficiaries are facing due to the restrictive measures that the French government had to impose by the French government to limit the spread of the coronavirus.
The Commission found that the French scheme is in line with the conditions set out in the Temporary Framework. In particular, the aid (i) will not exceed €10 million per company; (ii) will cover uncovered fixed costs incurred during a period comprised between 1 January 2021 to 30 November 2021; (iv) will be granted to undertakings that suffer a decline in turnover during the eligible period of at least 30% compared to the correspondent period prior to the coronavirus outbreak and (iii) will be granted no later than 31 December 2021.
The Commission concluded that the measure 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 Framework.
On this basis, the Commission approved the aid measure under EU State aid rules.