The Temporary Framework should remain in its current form until 31 December 2022. The European Commission may change its terms and duration.

The intended forms of support can be divided into three headings.

The first is support to affected businesses without any link to energy price increases. Under the Temporary Framework, each Member State is entitled to introduce state aid to provide up to €35,000 to affected businesses active in agriculture, fisheries and aquaculture. Businesses in other sectors may be granted aid of up to €400,000.

The second option is the provision of state guarantees and subsidised loans. On the basis of the aid authorised here, Member States will be able to grant subsidised state guarantees and loans at subsidised interest rates. The aim of the aid is to ensure the smooth running of the financing of companies affected by the crisis caused by the war.

At the same time, the temporary framework sets financial limits on the guarantees granted. In principle, guarantees should not be granted for a period longer than 6 years. Guarantees should not exceed 90 % of the principal amount of the guaranteed loan, provided that losses are borne by the credit institution and the Member State on a pro rata basis and on equal terms. Where losses are borne first by the Member State and then by the credit institution, the amount of the guarantee may not exceed 35 % of the principal amount of the guaranteed loan. The total amount of loans guaranteed should not exceed 15 % of the average annual turnover of the beneficiary over the last three closed accounting periods and 50 % of the energy costs over the last 12 months. As regards subsidised loans, the total amount of loans for one beneficiary should not exceed 15 % of its average annual turnover for the last three closed accounting periods and 50 % of its energy costs for the last 12 months. The loans may cover both investment and operating needs.

The last form of Temporary Framework allowed aid is compensation for additional costs incurred following increases in gas and electricity prices. The support primarily targets intensive energy users and can be provided in any form, including direct grants, taxes or loans. As regards the limit on the amount of aid, the total amount of aid granted to any one undertaking may not exceed 30 % of the eligible costs at any one time, with a maximum of EUR 2 million per undertaking. Member States may grant aid in excess of the above limits if this is necessary to ensure the maintenance of economic activities. However, in order for such aid to be granted, the conditions laid down in the Temporary Framework must be met, e.g. that they are intensive energy users whose purchases of energy products (including energy products other than natural gas and electricity) amount to at least 3 % of the value of production.

If you have any questions, please contact the author of this article or other members of EY Law or the EY team with whom you work.

Authors:

Vladimír Petráček
Martin Bareš