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Mr. Jeppe Kofod, Ministry of Foreign Affairs Asiatisk Plads 2 DK-1448 Copenhagen

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Mr. Jeppe Kofod, Ministry of Foreign Affairs Asiatisk Plads 2 DK-1448 Copenhagen EUROPEAN COMMISSION Brussels 20.5.2021 C(2021)3760 final PUBLIC VERSION This document is made available for information purposes only. Subject: State Aid SA.63019(2021/N) – Denmark COVID 19 – Third amendment to the Danish wage compensation scheme for undertakings prohibited from operating (SA.58515) Excellency, 1. PROCEDURE (1) By electronic notification of 7 May 2021, Denmark notified an amendment (the “notified amendment”) to the existing aid scheme approved in case SA.58515(2020/N) COVID-19: Danish wage compensation scheme for undertakings prohibited from operating, as amended (the “existing aid scheme”). (2) The existing aid scheme was approved by Commission decision C(2020)7093 final on 9 October 2020 (the “initial decision”) under sections 2, 3.1 and 3.10 of the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak (the “Temporary Framework”).1 (3) The existing aid scheme was amended in case SA.59543(2020/N) by Commission decision C(2020)8497 final on 26 November 2020 and in case SA.61947(2021/N) 1 Communication from the Commission - Temporary framework for State aid measures to support the economy in the current COVID-19 outbreak (OJ C 91I, 20.3.2020, p. 1), as amended by Commission Communications C(2020) 2215 (OJ C 112I, 4.4.2020, p. 1), C(2020) 3156 (OJ C 164, 13.5.2020, p. 3), C(2020) 4509 (OJ C 218, 2.7.2020, p. 3), C(2020) 7127 (OJ C 340I, 13.10.2020, p. 1) and C(2021) 564 (OJ C 34, 1.2.2021, p. 6). Mr. Jeppe Kofod, Ministry of Foreign Affairs Asiatisk Plads 2 DK-1448 Copenhagen Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111 by Commission decision C(2021)1420 final on 25 February 2021 (the “amending decisions”). (4) Denmark exceptionally agrees to waive its rights deriving from Article 342 of the Treaty on the Functioning of the European Union (“TFEU”), in conjunction with Article 3 of Regulation 1/19582 and to have this Decision adopted and notified in English. 2. DESCRIPTION OF THE MEASURE (5) The existing aid scheme provides for aid to undertakings subject to a related to COVID-19 governmental prohibition to conduct business, in the form of wage subsidies for monthly paid workers and hourly paid workers (under section 3.10 of the Temporary Framework), as well as limited amounts of aid for hourly paid workers (under section 3.1 of the Temporary Framework). (6) According to recital (18) of the initial decision, to benefit from the scheme, undertakings must commit “(…) to ensure that the relevant personnel does not work for the undertaking as long as the latter receives aid with respect to those employees”. This condition has not been amended by the amending decisions. (7) Under the notified amendment, Denmark wishes to amend the condition quoted in recital (6) above by including the following additional provision: “Workers can return to work for 7 days while the undertaking remains compensated for the workers. This is provided that the workers do not generate revenue to the undertaking.” (8) The Danish authorities submit that the amendment of the scheme is necessary to avoid lay-offs in Denmark since the long lockdown has called for preparations before the re-opening of many undertakings. In the days leading to the re- opening, the employees participating in such preparations will still not generate revenue for the undertaking and, therefore, the employer may, in many instances, lack the necessary liquidity to pay their salaries for these days. In the absence of the aid, undertakings might be prevented from re-opening and obliged to lay off the personnel concerned. (9) The Danish authorities confirm that all other conditions of the existing aid scheme remain unchanged. 3. ASSESSMENT 3.1. Lawfulness of the measure (10) By notifying the measure before putting it into effect, the Danish authorities have respected their obligations under Article 108(3) TFEU. In particular, the legal basis of the notified amendment is Act 225 of the Ministry of Industry, Business and Financial Affairs, which was approved on 29 April 2021 without prejudice to 2 Regulation No 1 determining the languages to be used by the European Economic Community, OJ 17, 6.10.1958, p. 385. 2 EU State aid rules. The Danish authorities confirm that no aid will be granted under the scheme, until it has been approved by the Commission. 3.2. Existence of State aid (11) For a measure to be categorised as aid within the meaning of Article 107(1) TFEU, all the conditions set out in that provision must be fulfilled. First, the measure must be imputable to the State and financed through State resources. Second, it must confer an advantage on its recipients. Third, that advantage must be selective in nature. Fourth, the measure must distort or threaten to distort competition and affect trade between Member States. (12) The presence of State aid within the meaning of Article 107 (1) TFEU was already established in recitals (46) to (51) of the initial decision, as well as in the amending decisions.3 The proposed amendment does not alter that conclusion. The Commission therefore refers to the respective assessment of the initial decision and the amending decisions and concludes that the scheme, as amended, constitutes State aid in the meaning of Article 107 (1) of the TFEU. 3.3. Compatibility (13) The Commission assessed the existing aid scheme’s compatibility with the internal market on the basis of Article 107 (3)(b) of the TFEU in light of sections 2, 3.1 and 3.10 of the Temporary Framework and concluded that it complied with the compatibility conditions set out in that Framework. (14) The Commission refers to its analysis of compatibility as set out in recitals (52) to (61) of the initial decision and in the amending decisions.4 (15) The Commission considers that the notified amendment does not affect the compatibility assessment of the existing aid scheme with the internal market, as carried out in the initial decision and the amending decisions. In particular, limited amounts of aid under section 3.1 and wage subsidies under section 3.10 of the Temporary Framework can be granted in relation to workers who return to work for 7 days in periods where their work does not contribute to generating immediate revenue for the undertaking. In addition, aid under the notified amendment is aimed at avoiding lay-offs during the COVID-19 outbreak (recital 8), which is in line with point 43(a) of the Temporary Framework. (16) Apart from the amendment referred to in recital (7) above, the Commission notes that there are no other alterations to the existing aid scheme (recital (9)). The Commission therefore considers that the notified amendment meets the conditions of the Temporary Framework, as set out in the initial decision. (17) The Commission therefore considers that the measure, as amended, is necessary, appropriate, and proportionate to remedy a serious disturbance in the economy of Denmark pursuant to Article 107 (3)(b) TFEU. 3 Recitals (23) and (24) of the Commission decision in case SA.59543(2020/N) and recitals (8) and (9) of the Commission decision in case SA.61947 (2021/N). 4 Recitals (25) to (29) of the Commission decision in case SA.59543(2020/N) and recitals (10) to (14) of the Commission decision in case SA.61947 (2021/N). 3 4. CONCLUSION The Commission has accordingly decided not to raise objections to the notified amendment to the existing aid scheme approved in case SA.58515(2020/N), as amended, on the ground that it is compatible with the internal market pursuant to Article 107(3)(b) of the Treaty on the Functioning of the European Union. The decision is based on non-confidential information and is therefore published in full on the Internet site: http://ec.europa.eu/competition/elojade/isef/index.cfm. Yours faithfully, For the Commission Margrethe VESTAGER Executive Vice-President 4 .
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