The European Commission has approved a €2 billion Finnish loan and guarantee scheme to support small and medium enterprises (‘SMEs’) and large companies in the context of Russia’s invasion of Ukraine. The scheme was approved under the State aid Temporary Crisis Framework, adopted by the Commission on 23 March 2022, based on Article 107(3)(b) of the Treaty on the Functioning of the European Union (‘TFEU’), recognising that the EU economy is experiencing a serious disturbance.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “Russia’s unjustified military aggression against Ukraine and the related sanctions are having a significant impact on the EU and the Finnish economy. This €2 billion scheme will enable Finland to support companies active in sectors affected by the current geopolitical crisis. We continue to stand with Ukraine and its people. At the same time, we continue working closely with Member States to ensure that national support measures can be put in place in a timely, coordinated and effective way, while protecting the level playing field in the Single Market.”
The Finnish measure
Finland notified to the Commission under the Temporary Crisis Framework a €2 billion scheme to provide liquidity support to SMEs as well as large companies in the context of Russia’s invasion of Ukraine.
This follows a Finnish measure to support the agricultural sector that the Commission approved on 20 May 2022 (SA.102914) and another one to support companies active across sectors that the Commission approved on 13 June 2022 (SA.103159).
Under this measure, the aid will take the form of (i) loans with subsidised interest rates; and (ii) guarantees on loans granted by Finnvera Plc, the State-owned specialised financing company.
The measure will be open to companies active across sectors affected by the current geopolitical crisis, with the exception of (i) the primary production of agricultural products and forestry; (ii) construction businesses acting also as property developers; and (iii) financial institutions.
The Commission found that the Finnish scheme is in line with the conditions set out in the Temporary Crisis Framework. In particular, (i) the duration of the loans and guarantees will not exceed six years, (ii) the interest rates and guarantee premiums respect the minimum levels set out in the Temporary Crisis Framework; and (iii) the loans and guarantees will be granted no later than 31 December 2022.
The Commission concluded that the Finnish scheme 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 Crisis Framework.
On this basis, the Commission approved the aid measure under EU State aid rules.