international employment law firm alliance L&E Global

Portugal: Temporary Framework for COVID-19 State Aid Expanded

Temporary framework for state aid in the context of COVID-19: expansion to equity, hybrid capital and subordinated debt

As there may be a need for MS to provide public support in the form of equity, hybrid capital instruments and/or other non-equity measures which increase the capacity to take on debt, such as subordinated debt, the COM proposed to include these measures in the temporary framework (TF). However, as these instruments are more valuable for recipients, tend to have a greater magnitude and are typically granted to fewer undertakings, they are, from the viewpoint of the COM, more distortive of competition than the other types of liquidity aid foreseen under the TF and therefore require qualified limitations and conditions. The resulting complexity of discussions between COM and MS is indicated by the fact that, although the consultation was initiated on 09/04/2020, it took until 08/05/2020 for the amendment to be adopted.

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