Uncapped EU Funds Available For Hardest Hit Sectors

Member State governments may grant financial assistance or other forms of aid to their companies and/or sectors in difficulty so long as this aid is compatible with EU State aid rules namely Articles 107(2) or Article 107(3) of the Treaty on the Functioning of the EU ("TFEU").

With the outbreak of the Covid-19 pandemic, in an attempt to act fast and stop the bleeding, Article 107(3) was immediately used as a legal basis for the adoption of the European Commission's Temporary Framework. This Temporary Framework provides for five types of aid namely (i) direct grants, selective tax advantages and advance payments up to a maximum cap of ?800,000 to address urgent liquidity needs, (ii) state guarantees for loans taken by companies from banks, (iii) subsidised public loans to companies (with favourable interest rates), (iv) safeguards for banks and (v) short-term export credit insurance.