EU Commission Approves Danish State Aid Compensation Scheme for Event Cancellations
The European Commission has deemed a €12 million state aid scheme to compensate event organisers in Denmark for losses incurred due to the cancellation of large events as a result of the Coronavirus pandemic, to be in-line with EU state aid rules.
Denmark is the first member state to notify the Commission of state aid measures in relation to the outbreak of the virus. The Commission has established a dedicated contact point for member states to provide them with guidance on possibilities under EU state aid rules.
Margrethe Vestager, EU Commission Executive Vice President in charge of competition policy said, ‘With the scheme, Denmark will compensate the organisers of events cancelled due to the Covid-19 outbreak for the losses suffered. This is the first State aid measure notified to us by a Member State in relation to the Covid-19 outbreak. We stand ready to work with all Member States to ensure that possible national support measures to tackle the outbreak of the virus can be put in place as quickly and effectively as possible, in line with EU rules.’
EU state aid rules enable member states to help companies cope with liquidity shortages and needing urgent rescue aid.
Some member states already have this type of scheme in place. In February 2019, the Commission approved a €400 million support scheme in Ireland to cover acute liquidity and rescue and restructuring needs of small and medium enterprises, as a Brexit preparedness measure.
Financial support from EU or national funds granted to health services or other public services to tackle the Covid-19 situation falls outside the scope of state aid control. The same applies to any public financial support given directly to citizens.
When state aid rules are applicable, member states can design ample aid measures to support specific companies or sectors suffering from the consequences of the Covid-19 outbreak in line with the existing EU state aid framework.
Denmark notified the Commission of its intention to set up the aid scheme to compensate organisers of events with more than 1,000 participants or targeted at designated risk groups, such as the elderly or vulnerable people, which had to be cancelled or postponed due to the COVID-19 outbreak.
Under the scheme, operators would be entitled to compensation for losses from the cancellations or postponment of the events.
Under the Treaty on the Functioning of the European Union, the Commission can approve state aid measures granted by member states to compensate specific companies or specific sectors for the damages directly caused by exceptional occurrences.
The Commission has deemed that the Covid-19 outbreak qualifies as an exceptional occurrence, as it is an extraordinary, unforeseeable event having a significant economic impact.
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