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The raising of the aid ceilings for small amounts of compatible aid to €1.8 million per company (previously €800,000) gives companies additional room for manoeuvre. The companies concerned now have a retroactive right to choose which State aid legal framework they want their application for Bridging Assistance II to be based on, with the selected framework then used to determine the final level of assistance awarded. For some enterprises, this may mean that Bridging Assistance II will also be able to be granted without the need to submit a statement of losses. This option will benefit small businesses in particular.

Federal Minister for Economic Affairs and Energy Mr Peter Altmaier said: “The extended State aid framework creates additional flexibility for many companies. We are making full use of this flexibility in national implementation and for our national coronavirus assistance. Specifically, we are granting companies the retroactive right to choose which State aid framework they wish to base their application for assistance on. The chosen framework is then used to determine the final amount of Bridging Assistance II to be awarded. Many companies, especially small ones, are no thus longer required to provide a statement of losses as before. This is good news, and a great relief for many small businesses.”

In terms of State aid law, Bridging Assistance II has thus far been covered exclusively by the ‘2020 Federal framework for assistance for fixed costs’. Based upon this framework, aid can be granted as a contribution towards a company’s uncovered fixed costs to the amount of up to €3 million per company or group of companies, provided that these are not already covered by other revenues. Currently, the ‘2020 Federal framework for assistance for fixed costs’ requires applicant companies to provide a statement of losses.

The increase in the aid ceiling for small amounts of compatible aid to €1.8 million per company (previously €800,000) by the European Commission on 28 January 2021 now creates the necessary scope under State aid law to provide the majority of companies with a right to choose which aid framework their application for Bridging Assistance II is based on. Companies can choose whether they want their application to be processed on the basis of the ‘Federal framework for small amounts of compatible aid’ or the ‘2020 Federal framework for assistance for fixed costs’. This right to choose is implemented simply and straightforwardly in the process of determining the final level of assistance to be granted (which is necessary in any case). There are no new requirements imposed on companies filing an application.

For companies for which the margin of up to €1.8 million set by the framework for small amounts of compatible aid is sufficient, this means that no proof of losses has to be provided for the applications to be processed. Such companies can base their applications on the framework for small amounts of compatible aid, which does not require any proof of losses. Some companies that have already received payments can then expect an additional payment where this is due. For companies for which the margin of up to €1.8 million set by the framework for small amounts of compatible aid is not sufficient, proof of losses must be provided as before. For these companies, the ‘2020 Federal framework for assistance for fixed costs’ continues to be the aid framework applied.

For applicants who wish to make use of the new option, the following points apply:

  • If applicants wish to make use of the new option, they do not need to submit a separate application to indicate this. Applications already submitted on the basis of the ‘2020 Federal framework for assistance for fixed costs’ and the corresponding notifications issued will remain valid until the final amount of aid is determined. A statement of losses is currently only to be submitted at the stage that the final amount of assistance is to be determined and is only relevant in the event that the option is not used (i.e. the Bridging Assistance II is to be permanently granted on the basis of the ‘2020 Federal framework for assistance for fixed costs’).
  • As part of the processing of applications to determine the final amount of assistance to be awarded (which is necessary in any case), companies are able to indicate that they wish their application for Bridging Assistance II to be processed on the basis of the ‘Federal framework for small amounts of compatible aid’. To be eligible for this option, companies must not exceed the aid ceiling of €1.8 million per company as a result (for example, through the cumulated amount of Bridging Assistance I and III, November Assistance and/or December Assistance applied for which is also granted on the basis of the ‘Federal framework for small amounts of compatible aid’).
  • If the option is used for the purpose of processing the final amount of assistance, the final award of Bridging Assistance II is consequently made on the basis of the ‘Federal framework for small amounts of compatible aid’. In such cases, no proof of losses is required. If the amount of Bridging Assistance II applied for has been reduced based on a calculation of losses that has already been carried out, the assistance for fixed costs already applied for can be adjusted upwards accordingly for use within the process of determining the final amount of aid.

The relevant lists of FAQs and guidelines for Bridging Assistance II will be updated swiftly.

At the same time, the European Commission will also receive the necessary notification of amendments to the ‘Federal framework for small amounts of compatible aid’, which will fully exploit the additional scope of the expanded State aid framework. The notification of amendment and subsequent approval by the European Commission under State aid law are procedurally necessary and are currently being carried out.