U.K.’s £50 Billion Subsidies for Companies Wins EU Approval

U.K.’s £50 Billion Subsidies for Companies Wins EU Approval

© Bloomberg. SOUTHEND ON SEA, ENGLAND – APRIL 04: Restaurants and cafes which would normally be bustling on a sunny day as today remain closed along the seafront on April 04, 2020 in southend on Sea, England. Southend Seafront parking has been suspended in effort to deter visitors to the seafront this weekend as the weather improves and ahead of the coming Bank Holiday weekend. The Coronavirus (COVID-19) pandemic has spread to many countries across the world, claiming over 50,000 lives and infecting over 1 million people. (Photo by John Keeble/Getty Images)

(Bloomberg) —

The U.K.’s plan to grant 50 billion pounds ($61.5 billion) to companies suffering the economic effects of the coronavirus outbreak won approval from the European Commission.

The EU must still police British state-aid programs because EU law is still in force during transition period as Britain exits the bloc. The EU has now cleared the U.K. to take equity stakes in companies and give direct payments, selective tax breaks and advance payments as well as offer state loan guarantees and subsidized public loans with favorable interest rates, according to an e-mailed press release Monday. The program also includes government spending on research and testing facilities and any products necessary to tackle the virus.

“The commission concluded that the measures are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of the U.K.” in line with state aid law. The subsidies can only go to companies that were not in difficulty on Dec. 31 and can be granted only until the end of the year.

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