Last month, a new Decree on the Establishment of the Program of Direct Allowances from the Budget of the Republic of Serbia to Entrepreneurs in the Private Sector in order to mitigate the economic consequences caused by the COVID-19 epidemic caused by SARS-CoV-2 virus (“Decree“) came into force. The Decree was adopted on February 11, 2021 by the Government of the Republic of Serbia (“Government“). Firstly, this is not the first “injection” of aid to the economy: back in April 2020, the Government established the legal framework for measures to support the economy. One of the measures was the Decree […]
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The European Commission (“Commission”) approved the EUR 12 billion German umbrella scheme to support companies adversely affected by the Covid-19 outbreak, which wreaked havoc on the economy during lockdowns last year. The Commission, which has a crucial role in preventing creation of further market asymmetries stemming from State aid, issued a statement explaining that the German scheme was a “proportionate” response and in line with the EU state aid rules. This scheme is approved under Article 107(2)(b) of the Treaty on the Functioning of the European Union (“TFEU”) which foresees compensating companies for damage directly caused by exceptional events. By […]
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You probably remember the “Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak” (“Temporary Framework”), adopted on March 19, 2020 (read more here), during the first wave of the coronavirus outbreak in Europe, which wreaked havoc in all major spheres of state activity of the EU Member States, as well as EU Association countries. Following this, the European Commission (“Commission”) decided to prolong and broaden the scope of the Temporary Framework on October 13, 2020 (article available here). The end… or a never-ending story? However, the story did not end in October: the Commission sent a new draft proposal […]
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The COVID-19 outbreak is placing a tremendous strain on economies, institutions, companies, individuals, and society in general. As a matter of fact, it has exposed the European Union’s weaknesses, contradictions, and limitations. However, despite the havoc it has wreaked, COVID-19 is not without silver linings. That said, in these unprecedented times, we have witnessed inspiring examples of empathy and solidarity between nations, between people, but also between generations. Unsurprisingly, the European Commission has spearheaded EU solidarity, as evidenced by their motto “United in Adversity.” In mid-March, the Commission announced a loosening of State aid restrictions, aimed at ensuring fair competition […]
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Here we bring you a more detailed overview of the State aid package granted to Montenegro Airlines A.D. Podgorica, Montenegro’s national airline. We touched on the topic just a few days ago. Introduction To recap, just days after announcing a EUR 133 million aid package for Montenegro Airlines the country’s national competition and state aid authority, the Protection of Competition Agency (“Agency“), launched an investigation into the State aid package. The Agency’s investigation found that the MEO test conditions had not been fulfilled, therefore qualifying this boost to Montenegro Airlines as State aid. On foot of that finding the Agency […]
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Certainly, you remember the Temporary Framework for State Aid Measures to Support the Economy in the Current COVID-19 Outbreak (“Temporary Framework”), adopted on March 19, 2020 (article available here), amidst the coronavirus which raised hell in all major spheres of state activity of both EU Member States and EU Association countries. On this wise, the European Commission has decided to prolong and extend the scope of the Temporary Framework on October 13, 2020. The bottom line – the Temporary Framework has been prolonged for six months until June 30, 2021, and the section to enable recapitalization support is prolonged for […]
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Challenges for the Serbian National Competition Authority (“NCA”) and the Serbian Commission for State Aid Control (“CSAC”) have ratcheted up over the last ten months. New members of Councils were appointed to both authorities. The start of their mandates coincided with the onset of the COVID-19 pandemic (“COVID-19”) which certainly derailed their original plans and ideas. Competition COVID-19 is keeping competition authorities on their toes on two fronts: keep an eye on crisis cartels whilst allowing necessary competitor collaboration. Unfortunately, unlike the European Commission (“EC”) which published the Temporary Framework for assessing antitrust issues related to business cooperation during COVID-19, […]
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Montenegro Airlines has been struggling with financial difficulties for some time. Last year, before the COVID-19 crisis, the Montenegrin Government committed EUR 150 million to Montenegro Airlines over a six-year period, including EUR 66 million this year. However, the situation took a turn for the worse. The predicted consequences of COVID-19 came true with travel restrictions across Europe and a dismal summer tourist season. Montenegro Airlines’ revenue slid 80% during the first seven months of 2020 compared to 2019. Namely, the airline generated EUR 30 million in revenue during the first half of 2019, but the figure fell to a […]
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On July 30, the Government of Serbia adopted a decision on direct payments and tax benefits for the private sector. This decision is part of the Legal framework for the implementation of the Second package of economic measures to mitigate the economic effects of the Covid-19 pandemic (The Second Package). Amounting to RSD 66 billion in size, the Second Package provides direct payments and tax benefits to the private sector, focusing on entrepreneurs and micro, small, and medium-sized enterprises (MSMEs). It consists of: Direct financial aid: Direct aid in the amount of 60% of minimum wage per employee. This measure […]
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On May 13, 2020, the General Court of the European Union (“Court”) dismissed the actions brought by airlines easyJet, Volotea and Germanwings, who sought the annulment of the European Commission’s (“Commission”) decision declaring illegal the aid granted by Italy to airlines serving Sardinia. The Court dismissed the airlines’ arguments relating to the absence of distortion of competition and of effect on trade between Member States. In that regard, the Court explained that a national measure can be declared as State aid if such an aid is liable to affect trade and distort competition, without the necessity of establishing that such […]
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Not so long ago, a trade association that represents private equity funds and the world’s largest association of private capital providers, Invest Europe (link), asked the European Commission (“Commission“) to make some tweaks. Namely, Invest Europe requested that Commission make changes to eligibility criteria for companies that wish to receive aid so as to avoid the exclusion of private equity-backed undertakings. More precisely, their wish was for the Commission to change how it defines “undertakings in difficulty” in its Temporary Framework so that only certain criteria instead of an entire definition apply to private equity-backed undertakings. Just a reminder, the […]
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The legal framework of economic support measures established on April 10, 2020 through a series of decrees, was followed less than a week later by another decree. Namely, the Government of the Republic of Serbia adopted the Decree moving the deadlines for holding the regular session of the general meeting and submitting annual and consolidated financial statements for companies, cooperatives, other legal entities and entrepreneurs, as well as deadlines for submitting corporate income tax returns and self-employment income tax returns, validity of authorized auditor licenses and real estate appraiser licenses which expire during the state of emergency declared because of […]
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On 10 April 2020, the Government of the Republic of Serbia adopted Decree on Fiscal Benefits and Direct Grants to Private Sector Companies („Decree“) that entered into force the same day. The Decree foresees numerous benefits for private sector companies comprising direct grants along with deferred payment deadlines of certain public revenues. If they meet the requirements laid down in the Decree, all business entities in the private sector can be beneficiaries of aid by filing a tax return. Although the Decree has comprehensively clarified all aspects of the use of State aid, several questions have arisen in practice […]
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Since the declaration of the state of emergency in Serbia, authorities have introduced scores of measures aimed at easing the financial pressure on both the economy and the public by the COVID-19 pandemic. To that end, the Government issued several decrees on fiscal benefits and financial support schemes, the National Bank of Serbia introduced a moratorium on repayment of bank loans and financial leasing instruments. Neither did Serbia’s Development Fund pass up the chance to contribute to the maintenance of commercial liquidity and financial stability. How so? The loan repayment moratorium approved by the Development Fund In line […]
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The legal framework for economic support measures was established on 10 April 2020 by adopting a number of regulations of the Government of the Republic of Serbia (“Government“). Within a week of their publication, however, the number of business owners’ concerns is growing. One of them is the Decree on Fiscal Benefits and Direct Benefits to Private Sector Companies and Financial Assistance to Citizens to Mitigate the Economic Consequences of COVID-19 (“Decree“), which addresses fiscal policy measures, including specifying the rules for grants made from the budget of the Republic of Serbia, VAT treatment of the sale of goods and […]
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The European Commission (“Commission”) published a statement on March 27, 2020 (available here), wherein it proposed an extension of State aid Temporary Framework (“Temporary Framework” – available here) that was adopted on March 19, 2020 with the aim of supporting European economies in the context of the COVID-19 outbreak. On a similar note, the changes introduced by the new State aid Temporary Framework were addressed in one of our recent articles (available here). The Commission’s Vice-President Margrethe Vestager has emphasized the importance of coordinated action and in that sense called for Member States to provide support for companies in these […]
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The outbreak of the COVID-19 virus has now spread to more than 200 countries all over the world and harsh measures taken to combat this even harsher nemesis are now leaving their mark on the economic sector. Many countries have opted to close all non-vital industries and sectors due to concern that workers that cannot switch to remote working are at increased risk of catching the coronavirus. This gave rise to two major issues. Firstly, those still working constantly run the risk of infection and reduction in their numbers, while those not working are at risk of running out of […]
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With the state of emergency declared on March 15, 2020 and the discernible impact of the COVID-19 pandemic on Serbian industry, the authorities are trying to navigate the crisis as best as they can to help the Serbian economy survive. The key to this effort is preserving the stability of public finances, which may be done by revoking earlier incentives given to certain industry branches. For instance, the authorities might decide to discontinue subsidies offered to privileged electricity producers in order to preserve the economy. But what would be the consequences of such measures? Subsidies in the energy sector […]
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On March 31, 2020, the Serbian Government adopted a €5.1 billion program of support measures for the economy (the Serbian Program). According to the Minister of Finance, Siniša Mali, who announced the measures earlier in the day “[the Serbian Program] is equivalent to half of the State budget and 11% of national GDP”. What makes it a legal rarity is that this is a precedent of ‘Covid-19 EU Association State aid’. In other words, this is the first case of Covid-19 related measures and aid being introduced in an EU association country based on Article 107(b) and (c) of the […]
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After adopting the Communication on the Temporary Framework for State aid measures to support the economy during the current COVID-19 outbreak (“TF”) (available here), the European Commission (“EC”) published the Notification Template (available here) on March 24, 2020, and invited Member States to provide their notifications. Notification of each Member State shall, first of all, include general information i.e. description of the serious disturbance in the economy and the official reaction of its authorities. By requiring this information and data, the EC aims to clarify specificities of the current situation in each country. Countries shall also provide a general […]
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The European Commission (“Commission”) promptly approved six new State aid schemes under the Temporary Legal Framework in order to support companies affected by this unprecedented situation caused by COVID-19 outbreak. In these circumstances, Margarete Vestager, Executive Vice-President in charge of Competition policy in the EU Commission, emphasized: “The economic impact of the Coronavirus outbreak is severe. Together with the Member States, we are working to manage this impact as much as we can. And we need to act in a coordinated manner, to help Europe’s economy weather this storm and bounce back strongly afterwards. “ United Kingdom The UK announced two […]
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The European Commission (“Commission”) approved the second State Aid Measure under the New Temporary Framework, as a response to the COVID-19 outbreak. COVID-19 crisis is delivering a “major shock” to EU economies and, as Von der Layen previously promised, the Commission will give a leg up to the Member States to weather the storm. In that regard, on March 22, 2020, the Commission promptly cleared, within 48 hours of the application being submitted, a State aid package by German Government, implemented through the German promotional bank Kreditanstalt für Wiederaufbau (“KfW”). Not to be found wanting, the German government has gone […]
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Having adopted the Temporary Legal Framework to support the economy in the current COVID-19 outbreak, the European Commission has cleared the first State aid schemes under the Framework. France was first to receive approval for three schemes notified under the Temporary Framework. “These [State aid schemes] are expected to mobilise €300 billion of liquidity support for companies affected by this unprecedented situation”, said Executive Vice President in charge of competition policy Margrethe Vestager. Envisaged as a tool to ensure liquidity, the aid will be available under favorable conditions and limited to those who need it most in the current circumstances. Covering guarantees […]
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Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak adopted with immediate effect (available here). Earlier this evening, March 19, 2020, the European Commission adopted special State aid legislation, in the word of EU’s competition head, Margrethe Vestager, with the aim “to act fast to manage the [COVID 19 economic] impact as much as we can”, which “enables Member States to use the full flexibility foreseen under State aid rules to support the economy at this difficult time” [emphasis added] (video available here). The new Temporary Framework is based on Article 107(3)(b) of the Treaty on […]
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There are no two ways about it – the COVID-19 pandemic has an enormous impact on the way businesses apply for State aid. In that regard, and as a part of the overall response to the negative economic effects of the outbreak, the European Commission (“Commission”) issued the Notification under Article 107(2)(b) TFEU (“Notification”). Fresh out of the Commission’s headquarters, the Notification provides detailed information on the content of State aid notifications under Article 107 (2) b to the Treaty on the Functioning of the European Union (“TFEU”). The article in question enables Member States to provide aid for companies affected by […]
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We are pleased to share the TerraLex Coronavirus Business Response Resource Center with you. It is a compilation of business solution resources from TerraLex members, some of the finest and best ranked firms, from around the globe relevant to contracts, labor, business continuity, etc. TerraLex and its members understand that in the rapidly evolving challenges posed by coronavirus and the prospect of recessionary times ahead, businesses are struggling with a variety of issues and looking to their trusted advisors for help. This Resource Center functions just like our cross-border guides. Visitors can select specific topics of interest and specific jurisdictions […]
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Addressing the Economic Impact of the COVID-19 Outbreak: State aid Measures Not only is the outbreak of COVID-19 in Europe an unprecedented health emergency, but it is also being greeted with widespread consternation by the global and European economy. Weathering the storm at global, European and national level requires a coordinated policy response that should support citizens, companies and economies. On March 13, 2020, the European Commission (“Commission”) set out a European coordinated response to counter the economic impact of the COVID-19 outbreak. The response includes a set of measures pertaining to State aid framework, fiscal policy, health policy etc. […]
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