ANNOUNCEMENT 25 Jun 2020

On 25 June 2020, the European Commission approved a state loan and guarantee scheme for the tourism industry, introduced by Lithuania, as a result of COVID-19. 

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

SA.57665 COVID-19: Lithuanian guarantees and loans for tour operators, accommodation and catering service providers:
https://ec.europa.eu/competition/state_aid/cases1/202026/286591_2168029_55_2.pdf

Original publication:
https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=OJ%3AC%3A2020%3A220%3ATOC

European Commission decision. SA.57665
https://ec.europa.eu/competition/state_aid/cases1/202026/286591_2168029_55_2.pdf

Inception date: 25 Jun 2020 | Removal date: 31 May 2021

State loan

On 25 June 2020, the European Commission approved a EUR 30 (USD 33.7) million state loan scheme from Lithuania. The aid supports tour operators and agencies, accommodation, and catering service providers of all sizes. The scheme is in force until 31 December 2020.

The objective of the scheme is to assist the industries affected the most by the COVID-19 pandemic. In this sense, the loans assist "tour operators to finance settlements with travellers for trips that did not take place as a result of the governmental restrictions, and accommodation and catering service providers for their necessary costs incurred as a result of the same [COVID-19 lockdown] restrictions." The loan amount for each beneficiary cannot exceed EUR 3 (USD 3.3) million.

In this context, the European Commission noted the: "The advantage granted by the measures is selective, since it is awarded only to certain undertakings active in the tourism travel, accommodation and catering sectors. The measures are liable to distort competition, since they strengthen the competitive position of their beneficiaries. They also affect trade between Member States, since those beneficiaries are active in sectors in which intra-Union trade exists."

Regardless, the Commission has decided not to raise objections to the aid on the grounds that "that it is compatible with the internal market pursuant to Article 107(3)(b) of the Treaty on the Functioning of the European Union."

The state aid is notified under the following objective: Remedy for a serious disturbance in the economy.

This state aid is approved under the Temporary Framework under the State Aid. The European Commission adopted the Temporary Framework under the State Aid rules of the European Union on 19 March 2020, see related state act.

Additionally, the European Commission also approved a EUR 20 (USD 2.2) million loan guarantee scheme as part of the same state aid measure. To see more information, please, see related state intervention. 

A state act in the GTA database is assessed solely in terms of the extent to which its implementation affects foreign commercial interests. On this metric, the financial support granted here is discriminatory.

Update

On 25 November 2021, the European Commission approved a prolongation of the measure until 30 June 2021. 

Update

On 31 May 2021, the European Commission approved an extension and budget increase of EUR 15 (USD 18) million for the state loan scheme. Please, see related state acts.

AFFECTED SECTORS

 
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AFFECTED PRODUCTS

 
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Inception date: 25 Jun 2020 | Removal date: 31 May 2021

Loan guarantee

On 25 June 2020, the European Commission approved a EUR 20 (USD 22.4) million loan guarantee scheme from Lithuania. The aid supports tour operators of all sizes. The scheme is in force until 31 December 2020.

The objective of the scheme is to assist the industries affected the most by the COVID-19 pandemic. In this sense, the guarantee "provides for aid [...] to secure performance of obligations of tour operators facing a sudden shortage or even unavailability of liquidity." The loan amount for each beneficiary cannot exceed EUR 800,000 (USD 897,000).

In this context, the European Commission noted the: "The advantage granted by the measures is selective, since it is awarded only to certain undertakings active in the tourism travel, accommodation and catering sectors. The measures are liable to distort competition, since they strengthen the competitive position of their beneficiaries. They also affect trade between Member States, since those beneficiaries are active in sectors in which intra-Union trade exists."

Regardless, the Commission has decided not to raise objections to the aid on the grounds that "that it is compatible with the internal market pursuant to Article 107(3)(b) of the Treaty on the Functioning of the European Union."

The state aid is notified under the following objective: Remedy for a serious disturbance in the economy.

This state aid is approved under the Temporary Framework under the State Aid. The European Commission adopted the Temporary Framework under the State Aid rules of the European Union on 19 March 2020, see related state act.

Additionally, the European Commission also approved a EUR 30 (USD 3.3) million state loan scheme as part of the same state aid measure. To see more information, please, see related state intervention. 

A state act in the GTA database is assessed solely in terms of the extent to which its implementation affects foreign commercial interests. On this metric, the financial support granted here is discriminatory.

Update

On 25 November 2021, the European Commission approved a prolongation of the measure until 30 June 2021.

Update

On 31 May 2021, the European Union approved a prolongation and EUR 1.8 (USD 2) million budget increase for the loan guarantee scheme. Given that the increase does not cross the GTA's USD 10 million threshold, it was not reported on the site. 

 
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