European Union: COVID-19 Key EU Developments, Policy & Regulatory Update No. 61

COMPETITION & STATE AID

State Aid

European Commission releases State of the Union 2021 report, including on COVID-related State aid (see here)

On 15 September 2021, the Commission published the State of the Union 2021 report on the Commission's work and achievements over the past year and future goals, particularly in dealing with the pandemic, which made 2020 one of the most difficult years in Europe's history (for further details, see below Section on Cybersecurity)

On the issue of the path to economic recovery, the State of the Union report cites, in particular, the rapid adoption of the State aid temporary framework enabling Member States to exercise the full flexibility of EU State aid rules to provide necessary support to the economy during the pandemic, while maintaining a level playing field.

The report indicates that since March 2020, the Commission reached more than 629 decisions approving over EUR 3.08 trillion in COVID-19-related aid across the EU.

European Commission consults on availability of private short-term export credit insurance capacity for exports in light of economic impact of pandemic (see here)

On 20 September 2021, the Commission opened a public consultation to assess the availability of private short-term export credit insurance capacity for exports to all countries listed as "marketable risk countries" in the 2012 Short-term export credit Communication ("STEC").* Export credit insurance shields sellers against risks raised by export credit used by foreign buyers to defer payment of goods and services.

To recall, under the STEC, trade within the EU and certain non-EU countries listed in its Annex with a maximum risk period of up to two years entails marketable risk and, in principle, should not be insured by the State or Statesupported insurers. As private insurers may offer such insurance, the Commission considers that the State is not needed to offer similar insurance.

However, with the COVID-19 outbreak, the Commission decided on 27 March 2020 to temporarily remove all countries from the list of marketable risk countries under the STEC. This enabled Member States to make available public short-term export credit insurance in light of the increasing insufficiency of private insurance capacity for exports to all countries in the current crisis.

Based on the results of the public consultation, the Commission will assess whether the current temporary removal of all countries from the list of "marketable risk" countries remains justified and should be further prolonged after 31 December 2021.

Towards establishing the current sufficiency of private capacity for insurance of exports to those countries, the Commission seeks feedback from Member States, credit insurers and other interested parties on:

The consultation is open for comments until 8 October 2021.

* The STEC is also undergoing review, and its public consultation closed on 23 September 2021. Adoption of the revised STEC is anticipated in Q4 2021. (see Jones Day COVID-19 Update No. 57 of 26 July 2021).