EU State aid temporary crisis framework in the context of the invasion of Ukraine

Click here to read the full article online

On 23 March 2022, the European Commission adopted a Temporary Crisis Framework for State aid measures to support the economy following the invasion of Ukraine by Russia, after a quick consultation with EU Member States. The Commission recognises that the current situation in Ukraine will have economic repercussions on the internal market that might affect undertakings in the EU, both directly and indirectly. In particular, undertakings in the EU might be affected by the disruption of trade flows and supply chains for EU imports from — and exports to — Ukraine, as well as unexpected price increases in the EU, particularly in natural gas and electricity. The Temporary Crisis Framework aims at ensuring liquidity and access to public funds for undertakings of all sizes that have been negatively affected by this context. Through the Temporary Crisis Framework, the Commission sets out the criteria for the assessment of compatibility with the internal market of State aid measures that EU Member States might adopt in this context, not only to remedy the direct economic effects following the invasion of Ukraine, but also the sanctions and counter-sanctions adopted by the EU and Russia, and other countries. Compatibility of State aid granted under the Temporary Crisis Framework is determined on the basis of Article 107(3)(b) TFEU, which deems compatible with the internal market “aid to remedy a serious disturbance in the economy of a Member State”. As such, the document further develops this legal basis for EU Member States to grant State aid. The Temporary Crisis Framework is applicable from 1 February 2022 until 31 December 2022, although a potential extension in light of international developments is not excluded.