European Commission approves €322 million Croatian loan guarantees and subsidised loans scheme for MSME companies affected by coronavirus outbreak

The European Commission has approved an approximately €322 million (HRK 2.450 million) Croatian scheme for loan guarantees and subsidised loans to micro companies and small and medium-sized enterprises (SMEs) 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 Croatian scheme of about €322 million will support micro companies and SMEs affected by the coronavirus outbreak by facilitating their access to finance in these difficult times. We continue to work in close cooperation with Member States to find workable solutions to mitigate the economic impact of the coronavirus outbreak, in line with EU rules.”

The Croatian support measure

Croatia notified to the Commission under the Temporary Framework an approximately €322 million (HRK 2.450 million) scheme to support lending to micro companies and SMEs affected by the coronavirus outbreak. Under the scheme, the support will take the form of subsidised loans and State guarantees on loans.

The scheme will be managed by HAMAG-BICRO – the Croatian Agency for SMEs, Innovations and Investments.

The scheme aims at enhancing the access to external financing of those micro companies and SMEs that are most severely affected by the economic impact of the coronavirus outbreak, thus ensuring the continuation of their activities.

The Commission found that the Croatian measure is in line with the conditions set out in the Temporary Framework. In particular, (i) it covers working capital loans and guarantees on working capital loans with a limited maturity and size; (ii) it is limited in time; (iii) it limits the risk taken by the State; (iii) it provides for adequate remuneration of the guarantees; and (iv) it contains safeguards to ensure that the aid is effectively channelled by the banks or other financial institutions to the beneficiaries in need.

The Commission concluded that the measure isnecessary, 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.

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