COVID-19: Emergency State aid scheme for Irish businesses approvedWednesday, 01 April 2020
A new Irish State aid scheme providing repayable loans to businesses was approved by the European Commission on 31 March. The scheme will be operated by Enterprise Ireland and is set to have an estimated budget of €200 million. It will be available for companies in certain manufacturing sectors or internationally traded employing 10 or more people who expect to experience a decline in turnover of at least 15% compared to their revenue before the coronavirus outbreak.
Following on from our previous update here, the European Commission has now approved a total of seventeen emergency State aid measures in the past two weeks in light of the COVID-19 outbreak. The majority of these measures, including the new Irish scheme, have been adopted under a new Temporary Framework introduced by the Commission, which loosens the State aid rules applicable to Member State economies affected by the outbreak and gives greater scope for public financial assistance. The new Framework permits State aid through a variety of methods including direct grants, State guarantees, subsidised public loans, safeguards for banks lending to SMEs, and short-term export credit insurance, with fewer restrictions on the aid amounts and eligible costs that can be provided to beneficiaries.
The new Framework relies on Article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU), which allows for aid to be granted to “remedy a serious disturbance in the economy of a Member State”. Each scheme notified and approved under the Framework relates to sectors of the economy and businesses set to most severely affected by the outbreak.
For a brief summary of some of the measures adopted to date in other EU Member States, see our recent article here.
Details on the administration of the Enterprise Ireland scheme are still being finalised, though it is likely that businesses will be able to apply for the funding in the next few days.
Please note that the content of this summary does not amount to professional advice. Legal and tax advice should be sought in respect of specific queries. The COVID-19 situation is evolving rapidly and this update is provided on the basis of information available as at 1 April 2020.