EC COVID-19 state aid recap scheme proposes limits to M&A, repayment mechanism by 2023

14 April,2020 - 09:00 pm UTC

The European Commission’s (EC) proposed amendment to its Temporary Framework (TF) to allow for recapitalisations of companies proposes limits on mergers and acquisitions and a series of binding tools to incentivise repayment by 2023, according to a draft document seen by this news service.

On Thursday (9 April), the EC said it had proposed to broaden the scope of the TF, which has loosened EU state aid rules so as to allow member state interventions, by enabling states to provide recapitalisations to companies in need.

The draft document allows member states to inject capital into enterprises facing solvency issues, but places structures on how member states can intervene and on how and when they are to be reimbursed. As with the other measures in the TF, member states may only grant recapitalisation measures until the end of 2020.

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