[Blog] Managing crisis state aid: EU law proves not too painful for the UK

Recent weeks have seen the rapid implementation of measures to manage and maintain EU state aid policy during the COVID-19 crisis. Some Member States, including the UK, have adopted urgent measures to ameliorate damage to their economies. During the transitional period of the Withdrawal Agreement the UK must follow EU law and therefore the responses by the UK Government to the COVID-19 fiscal and economic crisis should comply with EU rules. The EU is no stranger to adapting quickly to unforeseen economic crises. In the financial crisis starting in 2008 the European Commission introduced a Temporary State Aid Framework for the regulation of guarantees for banks and other financial institutions. Between 1 October 2008 and 1 October 2011, the European Commission approved aid to the financial sector totalling € 4.5 trillion (36.7% of EU GDP). This was complemented by a second Temporary Framework from 2008 – 2011 to support the real economy by facilitating speedy access to credit by businesses in order to maintain long term viability. Underpinning the EU response was a need to ensure that the principles behind the state aid rules could be maintained through the crisis. Lessons learnt from these measures have placed the EU in a strong position to act quickly and decisively to maintain the discipline of the EU State aid rules.