European Commission approves modification of Greek guarantee measure to support companies affected by the coronavirus outbreak

The European Commission has approved Greece’s modification of a previously approved guarantee scheme to support companies affected by the coronavirus outbreak, extending its scope and increasing its budget to €2.25 billion. The support measures available under the scheme will be co-financed by EU structural funds (ESIF). The existing scheme was initially approved on 3 April 2020 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 amended Greek scheme will be co-financed by EU structural funds to bring the budget to €2.25 billion in total. It will help Greek businesses, including the self-employed and undertakings active in agriculture and aquaculture sectors, cover immediate working capital needs and continue their activities in these difficult times. We continue working closely with the 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

Following the approval of a €2 billion Greek guarantee scheme to support companies affected by the coronavirus outbreak adopted on 3 April 2020, Greece notified to the Commission its modification under the Temporary Framework.

The newly established ‘COVID-19 Guarantee Fund’ of the Hellenic Development Bank (HDB) will be responsible for the implementation of the measure. The measure will be co-financed by the ESIF. Member States can decide how to use EU structural funds, in compliance with ESIF rules and – where these funds are used to grant support to companies, possibly with co-financing from the Member State – in compliance with EU State aid rules.

The existing scheme is modified as follow:

The scheme will now be accessible to the self-employed and to undertakings in the aquaculture and agriculture sector.
In addition to the issuance of partial guarantees for eligible working capital loans provided under the initial measure, the scheme will now also offer the possibility for subsidisation of the guarantee premiums for loans. The subsidisation will take the form of direct grants from the COVID-19 Guarantee Fund.
The budget is increased by €250 million to cover subsidisation of guarantees, bringing the total budget of the measure to €2.25 billion.
The Commission found that the Greek measure is in line with the conditions set out in the Temporary Framework. In particular: (i) the duration of the measure is until 31 December 2020, while the measure covers operating loans with a limited maturity and size, (ii) the measure is proportionate to remedy the consequences of the serious disturbance caused by the coronavirus outbreak, and (iii) the aid amounts 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 measure under EU State aid rules.

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