Belgium, (Brussels Morning Newspaper) The European Commission approved Italy’s aid scheme worth 10 billion euro to support companies affected by the crisis.
The EC noted in a statement on Tuesday that it approved the loan guarantee scheme under the state aid Temporary Crisis Framework, stressing that the EU economy is facing a crisis.
Margrethe Vestager, European Commissioner for Competition, pointed out “in the current context of economic uncertainty caused by the current geopolitical crisis, this 10 billion euro loan guarantee scheme will enable Italy to support affected companies and sectors.”
She added that the EC stands with Ukraine and supports EU member states, stressing the importance of providing support in timely manner while protecting competition.
The Commission pointed out that the scheme will provide solvency to companies and sectors affected by the crisis through state guarantees, which will be made available to all parts of the economy except the financial sector.
The aid will be provided through Italy’s SACE export credit agency which will offer financial leases, loans and recourse factoring.
The EC noted that maximum loan amounts under the scheme are equal to 50% of beneficiaries’ annual energy costs or 15% of their average annual turnover.
Scheme in accordance with rules
The body stressed that the scheme is in line with EU rules as maturity of loans does not exceed eight years, interest rates are in line with limits under the Temporary Crisis Framework and aid will be provided by the end of the year.
It pointed out that the scheme will not jeopardise competition and added that it includes safeguards to prevent misuse.
According to the Commission’s assessment, the guarantee scheme is proportionate, appropriate and necessary to cushion the blow of the crisis in Italy, which is why the body approved the proposal.
The EC adopted the Temporary Crisis Framework in March this year to help EU member states to support their respective economies in the crisis.
Under the framework, bloc members can provide aid to companies hit by the crisis and compensation for rising energy prices, among other.
The Commission pointed out that aid cannot be provided to Russian-controlled companies and concluded that the framework includes safeguards to minimise any negative effects.