State aid: EU Commission approves €4 million Estonian rent compensation scheme to support businesses affected by coronavirus outbreak

The European Commission approved a €4 million Estonian scheme to support businesses renting premises in shopping centres,in the context of the coronavirus outbreak.

The scheme was approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April 2020 and 8 May 2020. The public support, which will take the form of direct grants, is intended to cover part of the rent due by businesses located in shopping centres.

The amount of public support to which businesses will be entitled under the scheme will match, up to a maximum amount of 25% of the rent, the discounts that each lessor may decide to apply on the rents in view of the current crisis situation. This aims at incentivising the private sector to contribute towards the objective of mitigating the impact of the coronavirus outbreak.

The purpose of the scheme is to mitigate the sudden liquidity shortages that non-essential businesses in shopping centres are facing due to the closure imposed by the Estonian State between 27 March and 11 May to limit the spread of the coronavirus. The Commission found that the Estonian scheme is in line with the conditions set out in the Temporary Framework.

In particular, (i) the support per company will not exceed the limits as set out in the Temporary Framework; and (ii) the scheme will run until 31 December 2020. On this basis, the Commission approved the measure under EU State aid rules.More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here.

Arianna Podesta – Giulia Astuti –