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State Aid Tools to Tackle the Impact of COVID-19:

What Is the Role of Economic and Financial Analysis?

Nicole Robins, Laura Puglisi, Ling Yang

DOI https://doi.org/10.21552/estal/2020/2/5

Keywords: COVID-19, liquidity support, compensation for damages, rescue aid, restructuring aid, economic and financial analysis, recapitalisations


In response to the COVID-19 pandemic, the European Commission quickly provided guidance on how Member States can support companies during the crisis in a manner that is in line with State aid rules. With the Commission having approved €2.6 trillion of aid notified by Member States since the start of the pandemic, State aid rules have come under the spotlight more than ever before. Some argue that the different approaches adopted by Member States to deal with the crisis create significant competitive distortions between Member States, while others argue that State aid rules should be made more lenient. This article discusses the State aid tools that Member States can use to deal with the effects of the pandemic, focusing on the role of economic and financial analysis to support the application of these tools. The article examines how Member States can provide liquidity support to companies in compliance with State aid rules, before looking at how Member States could provide more longer-term funding solutions to companies to deal with the effects of the pandemic without breaching State aid rules.
Keywords: COVID-19, liquidity support, compensation for damages, rescue aid, restructuring aid, economic and financial analysis, recapitalisations

Nicole Robins heads the State aid practice at the economics and finance consultancy, Oxera, and is the Partner in charge of the firm’s Brussels office. Laura Puglisi and Ling Yang are consultants in Oxera’s Finance and Valuation practice specialising in State aid. Oxera is an independent economics and finance consultancy with a large State aid practice that has worked on an extensive number of State aid cases across the EU at the cutting-edge of the debate. For correspondence: <mailto:Nicole.Robins@oxera.com>.

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