State aid: European Commission approves French guarantee scheme for exporting companies affected by coronavirus outbreak
The European Commission has approved a French guarantee scheme for small and midsize companies with export activities that are affected by coronavirus outbreak. The scheme is expected to mobilise €150 million. 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 French guarantee scheme, which is expected to mobilise €150 million, will support exporting small and midsize companies affected by the coronavirus outbreak. The measure will help these businesses continue their activity during and after 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
France notified to the Commission under the Temporary Framework a guarantee scheme to support lending to small and midsize exporting companies affected by the coronavirus outbreak. The support, in the form of State guarantees on loans, will be accessible to all French exporting companies with an annual turnover below €1.5 billion. The scheme is expected to mobilise €150 million.
The scheme aims at limiting the risk associated with issuing loans 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 found that the scheme notified by France is in line with the conditions set out in the Temporary Framework. In particular, (i) it covers guarantee on operating loans with a limited maturity and size; (ii) it is limited in time; (iii) it limits the risk taken by the State to a maximum of 90%; (iv) it provides for minimum remuneration of the guarantees; and (v) contains adequate safeguards to ensure that the aid is effectively channelled 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.