The European Commission announced an extension and expansion of EU state aid provisions yesterday (January 28), a move welcomed by European travel and tourism associations.
The EC confirmed its State Aid Temporary Framework, unveiled last March, would be extended to December 31 this year and the caps on government loans increased by more than double.
The Commission also added a facility for governments to convert some loans, credit guarantees or repayable advances to businesses into direct grants.
Most of the temporary state aid provisions had been due to expire on June 30.
EU executive vice-president Margrethe Vestager, who also acts as EU competition commissioner, said “As the coronavirus outbreak persists, we need to make sure member states can provide businesses with the necessary support.”
She argued the latest provisions would “enable member states to make full use of the flexibility of state aid rules to support their economies, while limiting distortions to competition”.
The provisions allow for companies “especially hit by the coronavirus crisis, with turnover losses of at least 30% compared to the same period of 2019”, to receive up to €10 million from the state – up from the previous limit of €3 million.
Other companies can receive up to €1.8 million, an increase from the previous limit of €800,000.
The ‘turnover loss of at least 30%’ rule would qualify all EU travel and tourism businesses for government financial support.
Major EU airlines have already benefited from substantial state aid, with Lufthansa securing access to a €9 billion package last year, Air France €7 billion and KLM €4 billion.