IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: 01 Jan 2009 | Removal date: 01 Jan 2012
Still in force

Loan guarantee

On6 May 2009, Lithuania notified the measure "Limited amounts of compatible aid in the form of guarantees to credit institutions for loans taken by SMEs and large enterprises during the financial and economic crisis".
 
Lithuania stated that the financial and economic crisis starts affecting the real economy.
 
The aim of the notified scheme is to grant temporary aid to small and medium-sized enterprises (SMEs) as well as large undertakings that have been affected by a sudden shortage or unavailability of credit as a result of the global financial and economic crisis. The notified measure is explicitly based on Article 87(3)(b) of the EC Treaty, and relies on section 4.2.2 of the Commission communication "Temporary framework for State aid measures to support access to finance in the current financial and economic crisis"1 (hereinafter referred to as 'Temporary Framework').
 
The aid is provided in form of public guarantees.
 
The Lithuanian authorities estimate an overall budget of LTL 70 million. It is foreseen to use only national budget sources to cover INVEGA's guarantee losses resulting from this measure.
 
The Commission stated that the notified measure constitutes State aid within the meaning of Article 87 (1) of the EC Treaty and gave the following assessment:
 
" State resources are involved in the notified scheme since the aid is granted from national resources, via the respective aid granting authority at national level. The measure is selective since it will be granted only to certain firms. The measure conveys an advantage by making available limited amounts of aid which would not be available to the beneficiaries without the measure. The measure affects trade between Member States since the scheme is not limited to beneficiaries which are active in sectors where no intra-community trade exists. The measure distorts or threatens to distort competition." (par. 23-27 of the letter from the EC to Lithuania - Brussels, C(2009),State aid N 272/2009).
 
Article 87(3)(b) of the EC Treaty enables the Commission to declare aid compatible with the Common Market if it is "to remedy a serious disturbance in the economy of a Member State." This aid has to be applied restrictively and must tackle a disturbance in the entire economy of the Member State according to the interpretation of the Article 87(3)(b) by the Court of First Instance.
 
The Commission referred to its Communication on the financial crisis (The Temporary Framework) and concludes that the Measure complies with the conditions laid therein. Therefore, despite the measure constituting State aid pursuant to the Article 87(1) EC, it is compatible with the Common Market according to the Article 87(3)(b) EC Treaty. The Commission raises no objections against the measure at issue and authorizes it as emergency intervention in the face of the current financial crisis. (par. 29-35 of the letter).
 

Amendments to the Temporary Framework measure "Limited amounts of compatible aid" (N 272/2009) -
State aid N 523/2009 and N 46/2010
 
On 16 September 2009 Lithuania notified an amendment to the existing scheme (see above).
 
The new notification aims at extending the scope of application of the scheme in order to include two measures (measure on diversification into nonagricultural activities and measure on support for business creation and development), which are integrated in the Rural Development Programme for Lithuania 2007-2013. These measures are designed to encourage small, alternative, non-agricultural businesses in rural areas.
 
On 8 February 2010 Lithuania notified a secondamendment to the existing scheme. By means of the new amendment, the Lithuanian authorities intend to issue guarantees also to credit institutions which are not located within their territory. Under the existing scheme, the granting authority (INVEGA) could have issued guarantees only to credit institutions that operated within the territory (meaning being located in Lithuania). Furthermore, the Lithuanian authorities intend to increase the maximum guarantee amount for each guarantee from LTL 5 million to LTL 20 million. In addition, the total guaranteed amount that one company can receive will be raised from LTL 20 to LTL 25 million.
 
The Commission considered that the modification of the schemes does not alter the assessment given in case N272/2009 (see above).
 
Prolongation of the Temporary Framework scheme "Limited amounts of compatible aid" (N 272/2009) - State aid SA.32575 (2011/N
 
 
By electronic notification of 15 February 2011 Lithuania notified the prolongation of the existing aid scheme "Limited amounts of compatible aid" until 31 December 2011.
 
According to the EC, the notified prolongation of the scheme "Limited amounts of compatible aid" did not alter the Commission's previous assessment in the decisions of 8 June and 13 November 2009 (see above) and therefore considered the notified prolongation of the aid scheme as compatible with Article 107(3)(b) of the TFEU.
 
 
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.
 
 

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