The Constitutional Court (VfGH) has examined the legislation surrounding Corona aid for months and has now finally withdrawn parts of it. Less than €450 million has yet been paid out by the Covid-19 Financing Agency (COFAG), this aid money should continue to flow.
As part of its legal review, the Constitutional Court ruled that parts of the legislation were unconstitutional because the way administrative tasks were outsourced to a GmbH – COFAG – was not objective. Moreover, companies were wrongly not legally entitled to financial support.
The aid will continue to be paid out
The repeal will come into effect at the end of October 2024. Until then, the legislature has time to issue more detailed rules on the further activities and liquidation of COFAG, as the Constitutional Court announced in a press release. “Until such legal regulations are issued, COFAG can continue to perform the tasks assigned to it by the ABBAG Law and can therefore also disburse financial support,” it was emphasized.
Vienna’s local railways conducted the test
The Federal Covid-19 Financing Agency GmbH was established in accordance with the ABBAG Act. ABBAG was founded after the financial crisis to provide state banking support. The reason for investigating the ABBAG law was an application by Wiener Lokalbahnen Verkehrsdienste GmbH after COFAG did not grant a fixed cost subsidy requested by the company. Moreover, the complaint of the Vienna Local Railways was not accepted by the Constitutional Court.
In concrete terms, the Constitutional Court annuls several provisions of the Federal Law on the Establishment of a Federal Mining Participation Company (ABBAG Law) as unconstitutional. In addition to these provisions on COFAG, the Constitutional Court also revoked parts of the guidelines that were issued as regulations regulating the disbursement of financial assistance by COFAG as illegal. The repeal of the illegal provisions of the directives will come into force on April 15, 2024.
“Outstanding cases are being resolved”
For next year, the Ministry of Finance has budgeted “COFAG subsidies” amounting to 450 million euros, “Der Standard” recently wrote, citing internal ministry documents. According to the newspaper, they did not want to comment on this amount, but had already promised that the federal phase-out company, which manages COFAG, would finalize a draft as soon as the Constitutional Court ruling was available. “Any matters that are still outstanding will of course be dealt with.”
COFAG was hastily founded when Gernot Blümel (ÖVP) was Minister of Finance. The reason was the rapid need for state support for companies due to the corona pandemic. The opposition criticized the construction from the start. Above all, there was or is a lack of parliamentary control.
Source: Krone
I am Ida Scott, a journalist and content author with a passion for uncovering the truth. I have been writing professionally for Today Times Live since 2020 and specialize in political news. My career began when I was just 17; I had already developed a knack for research and an eye for detail which made me stand out from my peers.
