With a comprehensive package of measures, including the enactment of the Federal Act on the Establishment of the COVID-19 Crisis Management Fund (COVID-19-FondsG) and the amendment of the Federal Act on the Establishment of a Federal Wind-Down Stock Company (AABAG Act), the Parliament has created the legal basis for financial aid measures to cope with the COVID-19 crisis. Below you will find a brief summary of the most important information on financial aid measures in the form of questions and answers.

What is the volume of the COVID-19 crisis management fund ("COVID-19 Fund")?

The COVID-19 Fund is endowed with up to EUR 4 billion. The fund’s resources come from federal credit operations.

What can the COVID-19 Fund be used for?

The legislation enumerates the following examples:

• measures to stabilise health care.
• measures to revive the labour market (especially short-time work within the meaning of Section 13 para 1 of the Labour Market Policy Financing Act (AMPFG)).
• measures to maintain public order and security.
• measures in connection with the requirements for educational institutions.
• measures to cushion the loss of income as a result of the crisis.
• measures in connection with the Federal Epidemic Act 1950, Federal Law Gazette No. 186/1950.
• measures to revive the economy.

 

Who can benefit from the financial measures?

Companies that have their headquarters or a permanent establishment in Austria and carry out their main operational activities in Austria.

The Federal Minister of Finance will issue guidelines (by ordinance) for the granting of financial measures, in particular in regard to:

1. the group of beneficiary enterprises.

2. the form and purpose of the financial measures.

3. the amount of the financial measures.

4. duration of the financial measures.

5. rights of the Federal Government (or the authorised representative) in regard to information and inspection.

How are the resources of the COVID-19 Fund administered?

The Federal Wind-Down Stock Company ("ABBAG") acts as an "extension" of the Minister of Finance in "providing services and [in] taking financial measures in favour of companies which are necessary to maintain the solvency and bridge liquidity difficulties of these companies in connection with the spread of the SARS-CoV-2 pathogen and the resulting economic effects" (Section 2 para 1 No 3 ABBAG Act).

Is EU state aid law to be observed?

In the context of national measures, the applicable provisions of EU state aid law must be complied with. The European Commission is also calling for compliance with EU state aid law: the ample support measures by the Member States should be designed "in accordance with the existing EU state aid rules". To this end, the Commission has provided the following overview:

Against the background of the Corona crisis, Article 107 para 2 lit b TFEU enables Member States to compensate companies for the damage directly caused by exceptional occurrences without such aid being incompatible with the internal market. On this legal basis, the European Commission has already approved the Danish “Compensation scheme for cancellation of events related to COVID-19” on 12 March 2020 (see State Aid SA.56685 (2020/N)).

Moreover, the European Commission could authorise additional national support measures under Art 107 para 3 lit b TFEU (i.e. "to remedy a serious disturbance in the economy of a Member State"). Currently, this is only envisaged for Italy; however, the European Commission could take a similar approach for other Member States and is currently preparing a special legal framework under Art. 107 para 3 lit b TFEU, to be adopted in case of need.

 

Please note: This blog merely provides general information and does not constitute legal advice of any kind from Binder Grösswang Rechtsanwälte GmbH. The blog cannot replace individual legal consultation. Binder Grösswang Rechtsanwälte GmbH assumes no liability whatsoever for the content and correctness of the blog.