European Commission approves €150 million Lithuanian schemes to support economy in coronavirus outbreak
The European Commission has approved two Lithuanian aid schemes to support the Lithuanian economy in the context of the coronavirus outbreak. The schemes were approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April 2020.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The €150 million Lithuanian schemes will enable the granting of loans at favourable terms to help businesses cover immediate working capital needs and continue their activities in these difficult times. The close work with Member States continues and ensures that national support measures can be put in place in a timely, coordinated and effective way, in line with EU rules.”
The Lithuanian support measures
Lithuania notified to the Commission two support schemes, with a total estimated budget of €150 million under the Temporary Framework. The measures, which are offered by the national promotional institution INVEGA, aim at providing liquidity in the form of subsidised loans to companies affected by the coronavirus outbreak, in particular:
(i) The first measure, which is offered to SMEs via financial intermediaries, will facilitate access to finance in the form of subsidised loans for enterprises facing cash shortages.
(ii) The second measure, which is directly provided to companies, concerns loans for outstanding invoices.
The Commission found that the two Lithuanian measures are in line with the conditions set out in the Temporary Framework. In particular, (i) the underlying loan amount per company is limited to what is needed to cover its liquidity needs for the near future, (ii) the loans will only be provided until the end of this year, (iii) the loans are limited to a maximum time period of three years, and (iv) the interest rates respect the floors as set out in the Temporary Framework.
The Commission therefore concluded that the measures arenecessary, 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 measures under EU State aid rules.