State aid: Commission approves French schemes to support economy in Coronavirus outbreak
The European Commission has approved three French State aid schemes to support the French economy in the context of the Coronavirus outbreak. The schemes 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 French schemes within 48 hours from the entry into force of the Temporary Framework.
Executive Vice President Margrethe Vestager, in charge of competition policy, recently (21 March 2020) said:
"Our decision approves three measures taken by the French government to help its economy manage the impact of the Coronavirus outbreak. These are expected to mobilise €300 billion of liquidity support for companies affected by this unprecedented situation. Today, we have approved these schemes under the new State aid Temporary Framework - less than 48 hours from its adoption. We are working around the clock with Member States to enable them to take swift, effective and targeted action to support the European economy at this difficult time, while preserving the Single Market. Because we need the Single Market to weather this crisis and bounce back strongly afterwards."
The French support measures
France notified to the Commission three separate support schemes under the Temporary Framework. More specifically:
- Two schemes enabling the French public investment bank Bpifrance to provide State guarantees on commercial loans and credit lines, respectively, for enterprises with up to 5,000 employees.
- A scheme to provide State guarantees to banks on portfolios of new loans for all types of companies. This is direct aid to the companies that will enable banks to quickly provide liquidity to any company that needs it.
The French plan is expected to mobilise more than €300 billion of liquidity support for companies affected by the economic impact of the Coronavirus outbreak.
The Commission found that the French measures are in line with the conditions set out in the Temporary Framework. In particular, they cover guarantees on 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 the current situation. To achieve this goal, the measures also involve minimum remuneration and safeguards to ensure that the aid is effectively channelled by the banks to the beneficiaries in need.
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.
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