The COVID-19 pandemic urged countries to take immediate measures like social distancing, travel restrictions, quarantines and lock downs to shorten and limit the shock over societies and protect as much people as possible, particularly vulnerable persons and those in the group of risk.

These measures have an immediate impact on both demand and supply, and hit undertakings and employees, especially in the health, tourism, culture, retail and transport sectors.

Since these measures will have a disruptive impact on the economy of the Union as a whole, the European Commission provides temporary aid to help undertakings of all kinds may face a severe lack of liquidity. SMEs are at particular risk and immediate grants are provided.

The Temporary Framework to enable Member States to use the full flexibility foreseen under State aid rules to support the economy in the context of the SARS-CoV-2 outbreak provides for five types of aid, which can be granted by Member States:

(i)           Direct grants, selective tax advantages and advance payments: Member States will be able to set up schemes to grant up to €800,000 to a company to address its urgent liquidity needs.

(ii)         State guarantees for loans taken by companies from banks

(iii)        Subsidised public loans to companies

(iv)        Safeguards for banks that channel State aid to the real economy

(v)         Short-term export credit insurance

More details here