The EU heavily regulates state aid programmes although it has suspended some of its criteria in light of the virus outbreak’s economic toll.

“Many companies in Luxembourg, as in the rest of Europe, have seen their revenues significantly decline because of the restrictive measures necessary to limit the spread of the coronavirus,” said competition commission Margrethe Vestager in a written statement.

The government had announced a new round of aid on 13 November for companies that suffer a decline in turnover of at least 40% between November 2020 and March 2021 compared to the same time the year before. The estimated budget for the measure is €120mn.

It will help micro and small enterprises pay for up to 90% of costs not covered by revenue. Support for medium-sized and large companies is capped at 70%. Depending on the size of the business, they will receive between €20,000 and €200,000 per month between November and March.

“This scheme will enable Luxembourg to help these companies face their fixed costs that are not covered by revenues during this difficult time,” Vestager said. It is aimed at companies active in the hospitality, leisure and tourism industries, event management but also lifelong learning.

The commission previously approved aid programmes worth €892m in addition to a scheme by the government to guarantee bank loans for companies.