Support for uncovered fixed costs for businesses affected by COVID-19 in Germany: Court of Justice upholds 2022 GC Judgment
On 4 October 2024, the Court of Justice rendered its judgment in the case C-124/23 P, Breuniger v. Commission and Germany. It confirmed the GC’s judgment which rejected the action for annulment against Commission Decision of 20 November 2020 on state aid SA.59289 (2020/N) which approved a scheme to support uncovered fixed costs for businesses affected by COVID-19 in Germany, within the context of the Temporary Framework (TF).
The Commission considered the scheme compatible with EU state aid rules under Article 107(3)(b) TFEU, as it provided aid to businesses that experienced a turnover loss of at least 30%. Breuninger challenged the aid scheme, arguing that it was disproportionate and incompatible with the internal market. However, the GC dismissed the pleas, affirming that the aid scheme met the necessary criteria to ensure the viability of businesses during the pandemic.
The Court dismissed all the appeals raised by Breuninger and established that when examining the compatibility of measures under Article 107 (3)(b) TFEU, the Commission is not required to weigh the positive and negative effects of the aid scheme on competition, given the exceptional circumstances of the pandemic and the aid’s purpose of remedying serious economic disturbances.