State aid: Commission approves €4 million Portuguese employment aid scheme to preserve jobs on Azores Islands during coronavirus outbreak

The European Commission has approved a €4 million Portuguese aid scheme for preserving employment on the Azores Islands during the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework. The scheme aims at avoiding layoffs by compensating the wage costs of business in the Region of the Azores, which would otherwise have laid off personnel due to the containment measures adopted by the Portuguese authorities to limit the spread of the coronavirus outbreak. The scheme is open to employers who have experienced a decrease in turnover of at least 25% with respect to before the outbreak and meet certain eligibility conditions. The aid will take the form of a direct grant equal to maximum two regional monthly salaries. The Commission found that the Portuguese measure is in line with the conditions set out in the Temporary Framework. In particular, (i) the support will not exceed 80% of the gross salary of the benefitting personnel in the relevant period of 2021; (ii) the employers commit to keep the employees covered by the subsidies in continuous employment for the period during which they receive the aid; and (iii) the aid will be granted no later than 31 December 2021. The Commission concluded that the Portuguese measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measure under EU State aid rules. More information on the Temporary Framework and other 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.61240 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.