European Government Incentives & State Aid Update - May 2022
Hickey’s European Government Incentives & State Aid Update - March 2022
The following is an update on government incentives and state aid across the dynamic European region for the month of May 2022. Information and intelligence have been assembled by Hickey’s European Location Strategy and Incentives team.
Deadline Approaching for State Aid Temporary Framework
The majority of incentive programmes under the State Aid Temporary Framework to support economic recovery, in relation to the coronavirus outbreak, are set to expire on 30 June 2022.
This will bring to an end the increased aid ceiling of €2.3 million (€2.5 million when combined with de minimis aid) for direct grants, equity injections, selective tax advantages, and advance payment plans that were approved under the Framework. The de minimis aid limit of €200,000 over 3 years will remain in effect following the end of the Temporary Framework.
For companies in the EU still recovering from the impacts of the outbreak, this could be the last chance to benefit from the increased aid ceiling. Approved schemes under the Framework include:· Targeted support with deferral of tax payments and/or suspensions of social security contributions
Targeted support with wage subsidies to help retain employees who would otherwise have had to lay off.
State guarantees loans to help businesses cover immediate working capital and investment needs.
Subsidised public loans to companies with favourable interest rates to cover immediate working capital and investment needs
Plans that support investment towards a sustainable recovery, which were introduced to the Temporary Framework in November 2021, will remain open until 31 December 2022.
UPDATE: Temporary Crisis Framework
Following the approval of the Temporary Crisis Framework in March, the Commission has approved programmes by Germany to support the economy in the context of Russia's invasion of Ukraine. €20 billion has been allocated to support programmes aim to help companies impacted by the conflict and support can be provided in the following forms: (i) direct grants; (ii) tax or payment advantages; (iii) repayable advances; (iv) guarantees; (v) loans; (vi) equity; and (vii) hybrid financing. Approval is also in place for an umbrella scheme of €11 billion for (i) guarantees on loans (‘guarantee scheme'); and (ii) subsidised loans (‘subsidised loan scheme').
The Temporary Crisis Framework EU allows Member States flexibility to:
Grant up to €400,000 in aid to companies either directly affected by the war or indirectly by sanctions – this includes areas such as physical supply chain disruptions.
Ensure sufficient liquidity is available to businesses by way of State guarantees or subsidised loans to support investments or working capital needs.
Compensate companies for additional costs due to the massive spike in gas and electricity prices. Overall aid is limited to 30% of eligible costs (max €2 million) per beneficiary. Additional support up to €25 million can be given for energy-intensive users and up to €50 million in specific sectors (metal, glass fibres, pulp, fertiliser, chemical or hydrogen production.
We expect more programme approvals to follow.
For more information on these critical updates on European government incentives and state aid and/or to determine if your project is eligible, please connect with a Hickey EMEA Location Strategy & Incentives expert today: