State aid: Commission approves Danish guarantee scheme for SMEs affected by Coronavirus outbreak
23 Mar 2020 01:50 PM
The European Commission has found a DKK 1 billion (approx. €130 million) Danish guarantee scheme for small and medium-sized enterprises (SMEs) affected by Coronavirus outbreak to be in line with EU State aid rules. 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 Danish scheme within 48 hours from the entry into force of the Framework.
Executive Vice President Margrethe Vestager, in charge of competition policy, recently (21 March 2020) said:
"SMEs are the backbone of our economy. We need to make sure that they can overcome the extremely difficult situation triggered by the Coronavirus outbreak. The Danish guarantee scheme for SMEs is an important contribution to reaching this objective. Today, we have approved this measure under the new State aid Temporary Framework, within less than 48 hours from its adoption. We continue working with Member States to ensure timely, coordinated and effective action.”
The Danish support measures
Denmark notified to the Commission a guarantee scheme for SMEs affected by the Coronavirus outbreakunder the Temporary Framework. It has a budget of DKK 1 billion (approx. €130 million).
The scheme aims at limiting the risks associated with issuing operating loans to those companies that are most severely affected by the economic impact of the Coronavirus outbreak. The objective of the measure is to ensure these companies can continue their activities faced with the difficult situation caused by the coronavirus.
The Commission found that the Danish measures are in line with the conditions set out in the Temporary Framework. They cover guarantees on operating loans with a limited maturity and size, and limit the risk taken by the State to a maximum of 70%. 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 to the beneficiaries in need.
The Commission concluded that that the Danish guarantee scheme for SMEs will contribute to managing the economic impact of the coronavirus in Denmark. 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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