It should be taken into consideration that any State aid is, in principle, prohibited, unless considered compatible with the internal market by the EC. This prohibition aims to prevent public contributions from selectively benefiting certain companies (whether these are, inter alia, tax-related, subsidies, guarantees or subsidized loans) to the detriment of others, thus distorting healthy competition on the internal market.
On April 3, 2020 the European Commission announced the adoption of an amendment extending and adding flexibility to the Temporary Framework adopted on March 19, 2020 to enable Member States to give State aid for research, testing and production of coronavirus related products, and also to grant greater volumes of aid in under the categories already allowed in under the original Temporary Framework.
On March 19, 2020, the European Commission issued a communication setting out a Temporary Framework that provides for more flexible and quicker authorization of State aid granted to support the economy in the current COVID-19 outbreak. The Temporary Framework is based on article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU), which makes it possible to authorize aid intended to remedy a serious disturbance in the economy of a Member State.