The European Commission has adopted a temporary framework to help EU countries to make full use of existing state aid rules to support the economy, which is hard hit by the coronavirus pandemic. Rapid and effective measures are required to provide assistance to businesses, with a particular focus on SMEs. They need sufficient financial resources to ensure economic activity for the duration of the pandemic and beyond. The measures, which is officially entitled "Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak", acknowledges that the entire economic life of the EU is seriously disrupted. In order to contain or at best remedy these disturbances, five types of subsideis have been outlined:
- Direct subsidies, advancements or tax concessions that need to be repaid
- Government guarantees for bank credits to businesses
- Subsidised public loans for enterprises
- Assurances for banks that pass on state aid to the real economy
- Short-term export credit insurance
It should be noted that a large part of the financial resources is to be provided by the member states themselves. The temporary framework may be intended to extend and supplement the possibilities available to the 27 member states, but the EU budget is too limited to cover the costs incurred. The complete document on the Temporary Framework can be downloaded.