European Commission approves guarantee scheme of up to €3 billion to support the Flemish economy in coronavirus outbreak
The European Commission has approved a Belgian scheme of up to €3 billion, financed by the Flemish region, to support companies 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 coronavirus outbreak is having a severe impact on our economy. The scheme of up to €3 billion we approved supports companies in the Flemish Region through public guarantees on loans. This will help businesses cover immediate liquidity 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 manner, in line with EU rules.”
The support measure for the Flemish Region
Belgium notified to the Commission under the Temporary Framework a guarantee scheme for working capital and investment loans, to support companies active in the Flemish region and affected by the coronavirus outbreak.
The measure, with a total budget of €3 billion, aims at limiting the risk associated with issuing or restructuring loans to those companies that are most severely affected by the economic impact of the coronavirus outbreak, ensuring the continuation of activities.
The Commission found that the 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 near future, (ii) the guarantees will only be provided until the end of this year, (iii) the guarantees are limited to a maximum of six years, and (iv) guarantee fee premiums do not exceed the levels foreseen by the Temporary Framework.
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 measures under EU State aid rules.