European Commission approves €2 billion Greek guarantee measure to support companies affected by the coronavirus outbreak
The European Commission has approved today a €2 billion Greek aid scheme to support the Greek 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: “This Greek scheme of €2 billion we approved today enables the granting of guarantees on working capital loans to help Greek businesses cover immediate working capital needs and continue their activities in these difficult times. We continue working closely with Member States to ensure that national support measures can be put in place in a coordinated and effective way, in line with EU rules.”
The Greek support measure
Greece notified to the Commission a support measure under the Temporary Frameworkin the form of guarantees on loans.The measure will be implemented through the issuance of guarantees by the Hellenic Development Bank (HDB) to financial intermediaries. The measure will partially guarantee eligible working capital loans originated by financial intermediaries.
The scheme is open to all Greek undertakings with the exception of financial intermediaries, such as banks, undertakings active in aquaculture, in agriculture and in sectors non-eligible by the European Regional Development Fund. It enables the granting of guarantees on loans to help businesses cover immediate working capital needs.
The Commission found that the Greek measure is in line with the conditions set out in the Temporary Framework. In particular, it covers guarantees on operating loans with a limited maturity and size. It also limits the risk taken by the State to a maximum of 80%. This risk is curbed further by a restriction limiting the State’s exposure to 40% of the volume of loans issued by a financial intermediary. This ensures that support is swiftly available at favourable conditions. To achieve this goal, the measure also involves minimum remuneration and safeguards to ensure that the aid is channelled effectively by the banks to the beneficiaries in need.
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.