European Commission approves €2 billion Finnish public guarantee and subsidised loan scheme to support companies affected by the coronavirus outbreak
The European Commission has approved a €2 billion Finnish aid scheme to support the Finnish economy in the context of 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 2020.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The €2 billion scheme will enable Finland to grant loans at favourable terms and to provide public guarantees on loans to companies affected by the coronavirus outbreak. It will help businesses cover their immediate investment and working capital needs, and support them to continue their activities and maintain employment during and after the crisis. We continue to work closely with all Member States to ensure that national support measures can be put in place in a timely, coordinated and effective way, in line with EU rules.”
The Finnish support scheme
Finland notified to the Commission under the Temporary Framework a €2 billion scheme to support companies affected by the coronavirus outbreak. The scheme will be managed and implemented by the State-owned Specialised Financing Company, Finnvera Plc..
Under the scheme, the public support will take the form of:
– State guarantees on new investment and working capital loans; or
– Subsidised investment and working capital loans with favourable interest rates.
The scheme aims at providing liquidity to companies affected by the coronavirus outbreak, thus enabling them to continue their activities, start investments and maintain employment.
The Commission found that the Finnish measure is 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 foreseeable future, (ii) the subsidised loans will only be provided until the end of this year, (iii) the guarantees and subsidised loans are limited to a maximum time period of six years, and (iv) the guarantee premiums and reduced interest rates do not exceed the levels provided by 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.