Europaudvalget 2020-21
EUU Alm.del Bilag 12
Offentligt
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NOTAT
05 October 2020
2020 - 3374
Danish Government response to the urgent consultation on the 4th
amendment of Temporary Framework for State aid measures to sup-
port the economy in the current COVID-19 outbreak
The Danish government welcomes the Commission proposal to make a 4th
amendment to the Temporary Framework and to create transparency as to
what state aid frame work can be expected in 2021 in respect Covid-19.
The Temporary framework (TF) has been a very helpful and useful tool for
Denmark and the EU in order to cope with the negative impact on the econ-
omy and undertakings during the Covid-19 out-break and the national re-
strictions to limit the dispersion of the virus.
Please find below our comments to the draft.
1. Prolongation
We support the prolongation of the TF until 30 June 2021. Depending on
the development of the Covid-19 - and the continued need for restrictions
- we find that it can be necessary to prolong the TF beyond that date. Thus,
we recommend that the Commission keeps an open approach to assessing
the situation during the summer of 2021 and consider prolonging the TF
regime beyond 30 June 2021.
.
2. Section 3.1.
cap of 800.000 EUR
We urge the Commission to increase the ceiling for liquidity support under
TF point 3.1 to more than 800.000 EUR in parallel and in line with the
prolongation. If this cap is not increased, the state aid rules will not be able
to cope with the need of undertakings that already have received or will
receive aid up to the threshold in 2020 or in the beginning of 2021
and
who are still facing a shortage of liquidity due to the Covid-19 impact. This
will especially be the case for sectors that are most affected by Covid-19.
We would propose to increase the overall cap of 800.000 EUR with at least
800.000 EUR in 2021.
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3. New section 3.12
uncovered fixed costs
We support the proposal for a new point 3.12 in the TF - Aid in the form
of support for uncovered fixed costs and the logic behind. The provision is
very close to the principle in the Danish scheme for compensation to fixed
cost for companies particularly affected by the Covid-19 outbreak. The
Danish schemes are primarily state aid approved under article 107(2) b.
However, some parts of the scheme are approved under section 3.1. of the
TF.
Therefore, we find it necessary, that the Commission clarifies in the recitals
that the new section 3.12 of the Temporary Framework does not mean that
the approval of such schemes based on article 107(2) b of the TFEU will
be excluded if the conditions for applying this legal base are met.
We can accept the conditions that the aid should be granted no later than
30 June 2021 and cover uncovered fixed costs incurred during the period
between 1 September 2020 and 30 June 2021, including such costs incurred
in part of that period (‘eligibility period’).
However, we find that these new
rules must only apply to new schemes, and not schemes that have already
been established and politically agreed in Member States based on the ex-
isting rules.
On the one hand, we can also support, that the aid can be granted on the
basis of a scheme to undertakings in specific sectors, regions or of a certain
size that suffer a decline in turnover of at least 30 % compared to the same
period in 2019.
On the other hand, we find that since section 3.12 contains a mechanism
that prevents overcompensation and
like in the Danish schemes
ensures
that only documented net losses are covered, we find that both higher
amounts and higher aid intensities would be necessary and proportional and
should be allowed under section 3.12.
Therefore, we strongly believe, that the proposed aid intensity not exceed-
ing 50 % of the eligible costs, except for small and micro companies, where
the aid intensity shall not exceed 70 % of the eligible costs is far too re-
strictive and conservative. We would urge the commission to consider
higher ceilings for compensation of fixed costs going up to e.g. 80 % per-
cent in order to cope with the needs of the undertakings. We also find, that
it should be possible to grant a compensation of up to 90 % to undertakings
with 5 or less employees.
Furthermore, we find that the overall cap of 2 million EUR pr. undertaking
is too low and will not take into account sectors that are particularly eco-
nomically challenged by the Covid-19 crisis.
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4. Section 3.11
recapitalisation and sale of state equity
The Danish authorities welcomes the clarifications provided by points 29
and 30 in the draft. We find that the impact of the recapitalisation rules in
section 3.11 of the TF on existing State ownership of undertakings must be
addressed. State ownership of undertakings is protected by the principle of
neutrality in Article 345 TFEU and this principle applies in the context of
State aid. As a more general comment, the condition that the State must
“exit” from beneficiaries
of COVID-19 recapitalisation measures seems
difficult to reconcile with the principle of neutrality.
As for the scope of applicability of the new redemption rules, the Commis-
sion proposes that if Member States applies the proposed additional rules
for redemption of Covid-19 recapitalisation, they must inform the Com-
mission thereof. We find that the proposed amendments to the TF, notably
point 29 and 30, merely clarify what already applies for recapitalisations
approved under section 3.11 of the TF. Therefore, we would urge the Com-
mission to reconsider the need to amend existing Commission approvals in
order to obtain the result provided for in points 29 and 30.
In regard to valuation, in point 29 and 30 of the draft, it is stated that a
public consultation as mentioned in point 64 of the TF may be replaced by
an independent valuation. If the valuation is positive and at the level pre-
scribed in point 63 of the TF, the relevant COVID-19 recapitalisation is
considered to be redeemed. The provision is silent with regard to what will
apply in a situation where the valuation shows that the market value is zero
or negative. This is a situation that might occur in practice and the conse-
quences of a zero or negative valuation should be clear in the framework.
As for the terms Covid-19 recapitalisation versus Covid-19 equity the last
sentence of point 30 of the draft states:
“When the redemption of the COVID-19
recapitalisation concerns only a
fraction of the COVID-19 equity, letters (a) and (b) above apply to that
fraction of the COVID-19
equity.”
The distinction between
“Covid-19 recapitalisation”
and
“Covid-19
eq-
uity”
is difficult to determine. We propose that the wording of the last sen-
tence of point 30 is clarified.
5. Section 3.5
short term export credit
We would like to draw attention to a need to also extend paragraph 33 of
the TF regarding Short Term Export Credit Insurance and extend the list of
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non-marketable countries to all countries until 30 June 2021. We are aware
that the Commission has launched a consultation on Communication on
short term-export credit (STEC). Should the list of temporary non-market-
able countries in the STEC be extended to 30 June 2021, point 33 of section
3.5 should be amended accordingly:
“33. In
that context, the Commission considers all commercial and politi-
cal risks associated with exports to the countries listed in the Annex to
STEC as temporarily non-marketable
until 30 June 2021.”
Lastly, we encourage the Commission to include in the prolongation
measures notified and approved under TFEU Article 107, (e.g. measures
such as the Danish SA.57112), and we ask the Commission to actively in-
form Member States on how these measures will be addressed.