State aid: Commission approves €21 million Polish scheme to compensate tourism sector for damages suffered due to restrictive measures at the Polish-Belarusian border

The European Commission has approved, under EU State aid rules, a €21 million (PLN 100 million) Polish scheme to compensate companies active in the tourism sector for damages suffered as result of the restrictive measures adopted by Poland in response to the instrumentalisation of migrants by the Belarusian authorities at the EU's external border.

The Polish measure

On 2 September 2021, Poland declared the state of emergency in a part of the Podlaskie and Lubelskie provinces, covering a strip of around 3 kilometre length along the EU's external border with Belarus. In this context, Poland adopted a set of restrictive measures, including the prohibition for tourists to stay in the restricted area. These measures were taken in response to the exceptional situation triggered by the Lukashenko regime to undermine the EU's security. His targeted actions at EU's external borders included attempts to provoke an increase in irregular migration towards the EU. The prohibition for tourists to stay in the restricted area was in place until the end of June 2022.

Poland notified to the Commission its plan to adopt a €21 million (PLN 100 million) scheme to compensate the tourism sector for the losses incurred between September 2021 and June 2022.

Under the scheme, the aid will take the form of direct grants. The scheme will be open to companies in the tourism sector active in the restricted area, including hotels, restaurants and tour operators.

In order to qualify for the aid, beneficiaries must show that their sales decreased by at least 25 % compared those achieved between September 2018 and June 2019. The compensation will cover a fraction of the beneficiary's costs (i.e. all costs minus depreciation and amortisation costs) corresponding to its loss of turnover. The aid will be capped at 65% of the beneficiary's average monthly profit calculated over the three months preceding the prohibition for tourists.

Poland expects that up to 100 companies will benefit from the scheme.

The Commission's assessment

The Commission assessed the measure under EU State aid rules, in particular Article 107(2)(b) of the Treaty on the Functioning of the European Union, which enables Member States to compensate companies or sectors for damages directly caused by an exceptional occurrence, such as those caused by the Polish-Belarusian border crisis.

The Commission found that the situation at the Polish-Belarusian border qualifies as an exceptional occurrence:  it is an extraordinary, unforeseeable event having a significant scale taking into account, among others, the involvement of a third country instrumentalising migrants with the aim to destabilise the EU as a whole, the size of geographical area affected, the sudden large increase in irregular border crossings, as well as its duration and the state of emergencies declared by three EU Member States. Therefore, the Polish scheme to compensate for the damages directly linked to that event is justified.

Furthermore, the Commission concluded that the measure is proportionate, as it will only compensate damages which are directly linked to the situation at the Polish-Belarusian border. Moreover, necessary safeguards limiting the aid to the minimum necessary will be in place. In particular, the aid will be capped at the level of the profit foregone, calculated on the basis of the profit the beneficiaries would have realistically made in the absence of the restrictive measure. The envisaged compensation will therefore not exceed what is necessary to make good the damages.

On this basis, the Commission approved the Polish scheme under EU State aid rules.

The non-confidential version of the decision will be made available under the case number SA.102490 in the State aid case register on the Commission's competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.