State aid: Commission approves €3 billion Portuguese guarantee schemes for SMEs and midcaps affected by Coronavirus outbreak
The European Commission has found four Portuguese guarantee schemes for small and medium-sized enterprises (SMEs) and midcaps affected by the Coronavirus outbreak to be in line with EU State aid rules. The schemes, with a total budget of €3 billion, were approved under the State aid Temporary Framework to support the economy in the context of the COVID-19 outbreak adopted by the Commission on 19 March 2020. The Commission approved the four Portuguese schemes two days after the entry into force of the Framework.
Executive Vice President Margrethe Vestager, in charge of competition policy, said: “The economic impact of the Coronavirus outbreak is severe. Together with Member States, we are working to manage this impact as much as we can. And we need to act in a coordinated manner, to help Europe's economy weather this storm and bounce back strongly afterwards. The four Portuguese guarantee schemes for SMEs and midcaps are an important step in this direction. Today, we have approved these measures under the new State aid Temporary Framework, in close cooperation with the Portuguese government.”
The Portuguese support measures
Portugal notified to the Commission under the Temporary Framework four guarantee schemes for SMEs and midcaps affected by the Coronavirus outbreak, active in four different sectors: (i) tourism; (ii) restaurants (and other similar activities); (iii) extractive and Manufacturing industry; and (iv) travel agency activities, touristic animation, event organisation (and similar activities). The four schemes have a total budget of €3 billion.
The schemes aim at limiting the risks associated with issuing operating loans to those companies that are severely affected by the economic impact of the Coronavirus outbreak. The objective of the measures is to ensure that these companies have sufficient liquidity to safeguard jobs and continue their activities faced with the difficult situation caused by the Coronavirus outbreak.
The Commission found that the Portuguese measures are in line with the conditions set out in the Temporary Framework. In particular, they cover guarantees on operating loans with a limited maturity and size. They also limit the risk taken by the State to a maximum of 90%. This ensures that support is swiftly available at favourable conditions and limited to those who need it in this unprecedented situation. To achieve this goal, the measures also involve minimum remuneration and 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 four Portuguese guarantee schemes for SMEs and midcaps will contribute to managing the economic impact of the Coronavirus outbreak in Portugal. The measures are 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.