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New financial support measures due to the federal/federal state resolution of 28.10.2020 to combat the coronavirus pandemic

In order to compensate them for financial losses, the Federal Government will grant extraordinary economic aid for the undertakings, businesses, self-employed workers, associations and facilities covered by the temporary closures mandated by the above resolution. A funding volume of up to EUR 10 billion has been set aside for this purpose.

Extraordinary economic aid

For undertakings with up to 50 employees a one-off refund amounting to up to 75% of their sales revenue in November 2019 has been provided, with their fixed costs being applied at a flat rate.

  • The specific amount will be based on the average weekly sales revenue in the corresponding month of the previous year and it will be paid for each mandated week of lockdown.
  • For start-ups formed after November 2019, sales revenue from October 2020 will apply.
  • Self-employed persons without employees also have the option to use their average prior-year sales revenue from 2019 as their frame of reference.

For large undertakings the granting of extraordinary economic aid is subject to a federal regulation (in progress) and its examination by the EU Commission with the reliefs granted by the “Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak” (hereinafter: Temporary Framework) (

Paragraph 22 of this document stipulates that the Commission will consider such State aid compatible with the internal market on the basis of Article 107 (3) (b) TFEU provided that all of the following conditions are met:

a) The overall aid does not exceed EUR 800,000 per undertaking. The aid may be awarded in the form of direct grants, tax and payment advantages or other forms such as repayable advances, guarantees, loans and equity provided the total nominal value of such measures remains below the overall cap of EUR 800,000 per undertaking; all figures used must be gross, that is, before any deduction of tax or other charge;

b) The aid is granted on the basis of a scheme with an estimated budget;

c) Aid may not be granted to undertakings that were already in difficulty (within the meaning of the General Block Exemption Regulation) on 31 December 2019;

d) The aid is granted no later than 30 June 2021.

The upper limit of the refund amount for large undertakings is 70% of the above gross nominal amount of EUR 800,000. The extraordinary economic aid granted is to be offset against the government benefits already received for the period, such as reduced hours compensation or interim aid, or any subsequent interim aid payments.


Combination with so-called de minimis aid is permitted, in other words, small amounts of state aid totalling EUR 200,000 over three tax years, by observing the compounding requirements specified therein. If necessary, the upper limit of up to EUR 800,000 can be increased here to up to EUR 1 million. In principle, a combination could also be considered with respect to the general Block Exemption Regulations.

Uncovered fixed costs

The “Temporary Framework” also provides for contributions to the fixed costs for businesses and undertakings that, due to the suspension or restriction of their business activities, have demonstrably suffered a loss in sales of 30% compared with the corresponding prior-year period. The maximum amount of the aid is EUR 3 million per undertaking.

KfW rapid loans

The “Temporary Framework” also enables the addition of KfW coronavirus aid for self-employed persons without employees and undertakings with up to 10 employees to the special KfW programme 2020, which has been available since 23.03.2020. Through the principal banks the undertakings could apply for these KfW rapid loans to a value of up to EUR 300,000, depending on the sales revenue generated in 2019. The Federal Government wants to assume the full risk for this and release the principal banks from liability.

Validity of the “Temporary Framework”

The “Temporary Framework” initially applies in respect of the measures listed above until 30.06.2021.

Economic Stabilisation Fund (ESF)

For large undertakings that do not experience any noticeable effects from the extraordinary economic aid described above, the Federal Government’s ESF with a total volume of up to EUR 600 billion may be of interest. The ESF makes cross-industry aid available to undertakings to strengthen their capital base and overcome liquidity bottlenecks provided that they have met at least two of the following criteria in the last two completed financial years prior to 1 January 2020:

  • Total assets of more than EUR 43 million,
  • Sales revenue of more than EUR 50 million and
  • More than 249 employees (on average during the year).

Additional requirements for receiving support from the ESF are:

  • The undertaking was not already in difficulty on 31 December 2019.
  • No alternative financing opportunities are available.
  • There are clear prospects for the undertaking to continue independently as a going concern once the pandemic has been overcome.

The ESF is fundamentally subordinate to other aid programmes.

Note: The “Temporary Framework” allows for a certain compounding latitude provided that particular requirements have been met. However, the compounding limits must be adhered to in all circumstances, where coronavirus support payments are applied for or claimed on the basis of different legal grounds. Here there is the risk that a breach of the prohibition on compounding might provide grounds for economic subsidy fraud under Section 264 StGB (Strafgesetzbuch, German penal code) which, even in the event of a reckless offence, is punishable by a term of imprisonment of up to three years or a fine.


For more information, go to:

Corona crisis – First aid from PKF

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