ANNOUNCEMENT 24 Nov 2020

On 24 November 2020, the European Commission approved an expansion in the scope of a loan guarantee scheme approved to support companies affected by the Covid-19 outbreak.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising
Inception date: 24 Nov 2020 | Removal date: 30 Jun 2021

Loan guarantee

On 24 November 2020, the European Commission approved an amendment of a loan guarantee scheme from Bulgaria. The amendment expands the scope of the action from only SMEs to include large companies as well.  In addition, it also allows SMEs in financial trouble before the pandemic to get access to the guarantees. Companies from all sectors struggling with liquidity shortages due to a drop in activity prompted by the Covid-19 outbreak might now access the scheme. 

The original scheme was approved in April 2020 (see related state acts).

In this context, in the decision of April, the European Commission noted the: 'The measure is liable to distort competition, since it strengthens the competitive position of its beneficiaries. It also affects trade between Member States, since those beneficiaries are active in sectors in which intra-Union trade exists'.

Regardless, "the Commission has accordingly decided not to raise objections to the notified amendments on the grounds that they are compatible with the internal market pursuant to Article 107(3)(b) TFEU.".

The state aid is approved under the Temporary Framework under the State Aid and its amendments of 13 October 2020. The European Commission adopted the Temporary Framework under the State Aid rules of the European Union on 19 March (see related state acts).

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.

 

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