EU Commission approves EUR 208 million German federal ‘umbrella’ scheme to compensate companies active in trade fairs and congress sector for damage suffered due to the coronavirus outbreak

The European Commission has approved, under EU State aid rules, a EUR 208 million German federal umbrella scheme to compensate companies active in the trade fairs and congress sector for damages suffered due to the coronavirus outbreak. It follows another similar German scheme that the Commission approved in January 2021 (SA.59173). The scheme will be open to owners and operators of fairs and congress infrastructure in Germany, as well as intermediary companies that lease trade fairs and congress infrastructure from the owner to third parties, as well as those third parties leasing it. In order to be eligible, companies must have incurred a loss of profit between 1 January and 31 December 2021 due to the restrictive measures put in place by the ‘Länder’.

The scheme covers up to 100% of the loss of profit directly resulting from a government prohibition of all events or of all large events (with a capped number of allowed attendees). In general, the damage will be calculated as the difference between the average operating profits in the reference period in the years 2018 and 2019, and the actual profits in the same period in 2021. A beneficiary cannot claim compensation in relation to periods when in the Land concerned there were no prohibitions on trade fairs and congresses. In case of prohibition of only large events (which could thus still take place, but with a cap on attendees), losses that may result from lower attendance than still allowed (e.g. due to general reluctance of people to attend such events), cannot be compensated since they are not linked to the governmental measures.

The scheme includes a claw-back mechanism, whereby any possible public support in excess of the actual damage received by the beneficiaries will have to be paid back to the relevant granting public authority. The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union, which enables the Commission to approve State aid measures granted by Member States to compensate specific companies or specific sectors for the damages caused by exceptional occurrences, such as the coronavirus outbreak.

The Commission found that the German scheme will compensate damages that are directly linked to the coronavirus outbreak. It also found that the measure is proportionate, as the envisaged compensation does not exceed what is necessary to make good the damages. 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.64494 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.

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