European Commission Approves €13 Billion Portuguese Schemes To Support Economy In Coronavirus Outbreak
The European Commission has approved two Portuguese State aid schemes to support the Portuguese economy in the context of the coronavirus outbreak. The schemes were approved under the State aid Temporary Framework adopted by the Commission on March 19, 2020, as amended on April 3, 2020.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said, “The €13 billion Portuguese schemes will enable Portugal to provide direct grants and public guarantees on loans to help SMEs and large companies cover investment and working capital 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 Portuguese support measures
Portugal notified to the Commission two schemes, with a total estimated budget of €13 billion, to support companies affected by the coronavirus outbreak under the Temporary Framework, namely:
– A direct grant scheme; and
– A State guarantee scheme for investment and working capital loans granted by commercial banks.
The support under both schemes will be accessible to small and medium-sized enterprises (SMEs) and large companies facing difficulties as a result of the economic impact of the coronavirus outbreak. The aim of the scheme is to help businesses to cover their immediate working capital or investment needs, thus ensuring the continuation of their activities.
The Commission found that the Portuguese measures are in line with the conditions set out in the Temporary Framework. In particular:
– With respect to direct grants, the support per company will not exceed€800 000 per company as foreseen by the Temporary Framework;
– With respect to State guarantees, (i) the underlying loan amount per company covered by a guarantee is limited as set out in the Temporary Framework, (ii) the guarantees are limited to a maximum of six years, and (iii) the guarantee fee premiums do not exceed the levels foreseen by the Temporary Framework.
The Commission concluded that 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.