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Law360 (May 12, 2020, 9:58 PM EDT) -- Two months after issuing the first approval for a state aid measure aimed at combating COVID-19 and its economic devastation, European Union antitrust officials continue to sign off on member projects at lightning pace, clocking more than 100 decisions totaling almost €2 trillion ($2.17 trillion).
As of Tuesday, the European Commission had signed off on state aid projects proposed by 27 member countries — including the exiting United Kingdom — with Cyprus the only member not yet named in a clearance announcement. Enforcers signed off on the very first coronavirus aid plan on March 12. Winning commission approval means enforcers have deemed the aid as "necessary, appropriate and proportionate."
Some aid projects — which do not require their total budgets to be reported — were cleared under existing EU rules. But most got the go-ahead under a temporary framework specifically established to review the direct grants, loan guarantees, tax breaks, wage subsidies and other measures aimed at combating the pandemic itself and its economic fallout.
The commission put the amount of aid so far approved at roughly €1.9 trillion on May 8, when the antitrust enforcer adopted its second tweak to the temporary framework. In the days since, it has signed off on another nearly €12 billion in programs proposed by Greece, Poland, the United Kingdom, Belgium, Croatia and Latvia.
The state aid cleared in just those four days largely run the gamut in both scale and type. They range from the tiny — with a €1.5 million Latvian zero-interest loan program for agriculture-focused companies — to the huge, with a €10.3 billion U.K. program of direct grants to lower-income individuals who are self-employed.
Greece also offered support directly to individuals, with a one-time €800 payment to the self-employed or those working at companies with fewer than 20 employees. Poland and Croatia represented another popular mode of aid, with the former cleared for a €450 million loan and public loan guarantee program and the latter getting the go-ahead for a €322 million plan for subsidized loans and loan guarantees to small and mid-sized companies.
Belgium is somewhat of an outlier in getting aid approved for a particular region — Wallonia. While the commission has signed off on regional projects, including several in Belgium, most state aid has been national in scope. But in another vein, the Wallonia aid is more typical, representing research and development aimed at combating the pandemic — in this case, €25 million cleared for direct grants and repayable advances.
Most of the support so far has focused on a member country's economy as a whole or specific swaths of industry such as agriculture, exporters and airlines. Yet the sizes of businesses that will receive support as a result of the aid is often a deciding factor, with small and mid-sized companies being a particular focus, although projects can include large corporations or are available regardless of size.
A handful of projects, however, have gone to very targeted recipients that are big players in the national economy.
France in particular has been cleared for a combined €12 billion, mostly in loans, to Renault and Air France. Renault's €5 billion loan guarantee required separate approval from a larger loan guarantee program, also cleared by enforcers, because the guarantee covered 90% of the loan while the other program covered only 70% for other participants. Air France is in turn getting €7 billion in a state guarantee on loans, as well as a shareholder loan.
And several approval announcements represent updates and expansions to previously cleared aid projects. For instance, two weeks after France was first cleared on March 30 for a €1.2 billion plan for direct grants to the self-employed and companies with 10 or fewer workers, it got the go-ahead to extend the project through April and add another €3.4 billion to the budget.
Virtually every country has had multiple aid projects approved, save for Romania and Slovakia. Romania got the go-ahead April 11 for a €3.3 billion plan for direct grants and loan guarantees for small and mid-sized companies, while Slovakia was cleared on April 21 for a wage subsidy project with a €2 billion budget.
Pumping out state aid approvals at lightning speed has forced the commission to shuffle its priorities considerably. The enforcer, for instance, has asked companies to hold off on submitting merger notifications where possible as it works to simultaneously facilitate corporate cooperation aimed at combating COVID-19 while warning against any anticompetitive attempts to take advantage of the situation.
So far, the pandemic has killed more than 148,000 people in Europe and infected over 1.2 million people, according to European Centre for Disease Prevention and Control data.
--Editing by Philip Shea and Jill Coffey.
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