The European Commission on Tuesday put forward more flexible state aid rules so that EU member states' governments could support the economy in dealing with the impact of the coronavirus pandemic.

The new State Aid Temporary Framework enables national governments to give companies direct grants or tax advantages of up to €500,000, to give subsidised State guarantees on bank loans, and to enable public and private loans with subsidised interest rates.

The new rules also realise the important role of banks in helping small and medium-sized enterprises, so all aid will be treated as direct aid to the banks’ clients, and not to the banks themselves.

The proposal for a State Aid Temporary Framework has been sent to member states for consultation. The European Commission has underscored that its goal is to adopt the proposal within a few days, which is very fast for the European Union.

During the financial crisis, when decision-making was also significantly accelerated, it used to take three weeks from the beginning of internal consultation to the adoption of a proposal.