European Commission approves French guarantee scheme for exporting small and midsize companies affected by coronavirus outbreak
The European Commission has approved, under EU State aid rules, a French guarantee scheme for small and midsize companies with export activities that are affected by the coronavirus outbreak.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The French guarantee scheme, which is expected to mobilise €200 million, will support exporting small and midsize companies affected by the coronavirus outbreak. The measure will help these businesses continue their activity during the outbreak. We continue working closely with Member States to ensure that national support measures can be put in place in a coordinated and effective manner, in line with EU rules.”
The French support measure
Francenotified to the Commission a guarantee scheme to support activities of small and midsize exporting companies affected by the coronavirus outbreak. The support, in the form of State guarantees, will be accessible to all French exporting companies with an annual turnover below €1.5 billion. The measure is expected to mobilise €200 million.
The scheme aims at limiting the risk associated with issuing financing guarantees to those exporting companies that are most severely affected by the economic impact of the coronavirus outbreak, thus ensuring the continuation of their activities.
The Commission assessed the measure under EU State aid rules, and in particular Article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures implemented by Member States to remedy a serious disturbance in their economy.
The Commission found that the scheme notified by France is compatible with the principles set out in the EU Treaty and is well targeted to remedy a serious disturbance to the French economy. In particular, (i) it covers guarantees with a limited maturity and size; (ii) the guarantees will only be provided until the end of this year; (iii) it limits the risk taken by the State to a maximum of 90%; (iv) the guarantees can be offered to all exporting companies in France; (v) the guarantee mechanism ensures risk sharing among its users; and (vi) the guarantee fee premiums provide a sufficient remuneration for the French State.
The Commission therefore concluded that the measure will contribute to managing the economic impact of the coronavirus in France. It 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 general principles set out in the Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April and 8 May 2020.
On this basis, the Commission approved the measures under EU State aid rules.