There are a number of ways that EU member states can take effective action to limit economic damage caused by the impact of coronavirus Covid-19, according to European Commission Executive Vice-President Margrethe Vestager.
In a statement delivered earlier today, Friday, March 13, following the announcement of the €37 billion aid package, the executive vice-president said: “The European rules on state aid enable governments to take effective action.
“To name just three examples on how to compensate for damages and provide liquidity to companies.”
She said that the commission received the first application for state aid to tackle the effects of the coronavirus on Wednesday, March 11, from Denmark.
“The Danish government submitted its plans to compensate companies that had to cancel events with more than 1,000 people.
“We signed off on those plans within 24 hours.”
Continuing, the executive vice-president said:
We will work just as fast with any other member state that wants to introduce schemes to compensate businesses for the damage, which Covid-19 outbreak causes.
“And of course, governments can also help individuals directly – this doesn’t need state aid approval either.
“For instance, they might decide to reimburse people for tickets to cancelled events.”
Moving onto the second example of state aid options, Vestager explained that governments can put in place schemes that give small and medium-sized companies “the urgent liquidity they need”.
Already, nine member states have that sort of scheme in place – and we will work with others who’d like to do the same, or to increase the budgets of existing schemes.
Finally, the executive vice-president pointed to banks for the third option.
“Some governments may want to use banks as a channel for support to the economy – including to small and medium-sized companies.
“We will work with governments on this. Today, more than a decade after the financial crisis, European banks are stronger and more resilient.
“If need be in the coming weeks and months, we do have the rules in place to enable governments to ensure banks have adequate liquidity to lend to their customers,” Vice-President Vestager concluded.