The European Commission has approved a Maltese State aid scheme to support the economy in the context of the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework to support the economy in the context of the COVID-19 outbreak.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This €350 million Maltese scheme will enable public guarantees on loans to support the Maltese economy during the coronavirus outbreak. It will help businesses cover immediate 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 timely, coordinated and effective way, in line with EU rules.”
The Maltese support measure
Malta notified to the Commission under the Temporary Framework a guarantee scheme for working capital loans granted by commercial banks to support companies affected by the coronavirus outbreak. The scheme has an estimated budget of €350 million.
The Commission found that the Maltese measure is in line with the conditions set out in the Temporary Framework. In particular: (i) the underlying loan amount per company is linked to cover its liquidity needs for the foreseeable future, (ii) the guarantees will only be provided until the end of this year, (iii) the guarantees are limited to a maximum of six years, and (iv) guarantee fee premiums 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 measures under EU State aid rules.