State aid: Commission approves €148 million Danish scheme to compensate companies for damages still suffered due to coronavirus outbreak

The European Commission has approved under EU State aid rules a DKK 1.1 billion (approximately €148 million) Danish scheme to compensate damages suffered by companies in the tourism and travel-related sectors. The scheme will be open to companies active in those sectors and whose activities are still affected by previous border closure and travel restrictions that have now been lifted, or by the remaining border and travel related measures implemented by the Danish government to limit the spread of the virus. Under the scheme, such companies, which have a documented decline in turnover of more than 35% because of the coronavirus outbreak, will be entitled to compensation for the damage they suffer. This will be applicable for the period between 8 July to 31 August 2020 compared to a reference period before the coronavirus outbreak. In particular, they will receive a compensation in the form of a partial or full coverage of the fixed costs that they continue to bear. The Danish authorities foresee several levels of compensation according to the level of turnover decline. The maximum aid amount per company is DKK 60 million (approximately €8 million). The Danish authorities will carry out ex-post checks to ensure that the compensation does not exceed the actual damage suffered. The public support in excess of the actual damage received by the beneficiaries will have to be paid back to the Danish State. The Commission found that the scheme is in line with Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures granted by Member States to compensate specific companies or specific sectors for the damages directly caused by exceptional occurrences, such as the coronavirus outbreak. The Commission found that, in spite of the progressive reopening of the Danish society, the scheme will compensate damages that are still directly linked to the coronavirus outbreak and the subsequent measures adopted by the Danish government. It also found that the measure is proportionate, as the envisaged compensation does not exceed what is necessary to make good the damage. The Commission therefore concluded that the scheme is in line with EU State aid rules. More information on the actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.57932 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.