European Commission approves €1.5 million Latvian scheme to support companies active in the agricultural sector affected by coronavirus outbreak
The European Commission has approved a €1.5 million Latvian scheme to support companies active in the primary agricultural production sector affected by the coronavirus outbreak.The scheme was approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April and 8 May 2020.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This €1.5 million scheme will enable the provision of zero-interest rate loans of up to €100,000 to companies active in the agricultural sector in Latvia. The measure will help them cover their immediate liquidity needs and continue their essential activities during these difficult times. We continue to work with Member States to ensure that national support measures to mitigate the economic impact of the coronavirus outbreak can be put in place in a coordinated way, in line with EU rules”
The Latvian support measure
Latvia notified to the Commission under the Temporary Framework a scheme, with an estimated budget of €1.5 million, to support companies active in the primary agricultural production sector affected by the coronavirus outbreak. The support will be accessible to companies of all sizes active in this sector.
Under the scheme, support will be granted in the form of zero-interest rate loans by the Rural Support Service, a state administration institution operating under the supervision of the Latvian Ministry of Agriculture.
The scheme will enable companies active in the primary agricultural production sector to stabilise their cash flow and pay for supplied goods, raw materials (such as seeds, planting materials, plant protection products, mineral fertilisers) and services.
The Commission found that the Latvian scheme is in line with the conditions set out in the Temporary Framework. In particular, the amount of the zero-interest rate loan per company does not exceed €100,000 and the loan agreements will be signed no later than on 31 December 2020.
The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework.
On this basis, the Commission approved the measure under EU State aid rules.