ANNOUNCED AS TEMPORARYNo
Bailout (capital injection or equity participation)
On 25 February 2015, the European Commission approved a German federal framework for providing rescue aid to small and medium-sized enterprises in difficulty. The aid will be distributed by the states ("Länder") and the planned annual budget should reach 60 million EUR.
All SMEs are eligible for the scheme unless they operate in the coal and steel sector or if they are covered by additional provisions for financial institutions (art. 4 of the letter from the EC to Germany, 25.02.2015). Also, SMEs in the agriculture, fishery and aquaculture ought to comply with the additional EU guidelines for state aid in the three sectors. The maximum amount of aid per single entity was set to 10 million EUR.
Furthermore, the concrete criteria for a company being defined as "in difficulty" are explained in article 6 of the letter from the EC to Germany (cf. Sources).
The scheme came into force on 1 March 2015 and will apply until the end of 2020.
According to the Commission, "The terms of the public support granted on the basis of the scheme are terms that the beneficiaries, which are undertakings in difficulty, could not obtain on the market. As such, they give a selective advantage to the beneficiaries. The public support granted in this manner, furthermore, strengthens the position of the beneficiaries compared to that of their competitors in Germany and in other Member States and must therefore be regarded as distorting competition and affecting trade between Member States"(art. 45, letter from the EC to Germany, 25.02.2015). However, the EC deemed the aid to be compatible with the single market.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.
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