State aid: Commission approves modification of Spanish schemes, including €10 billion budget increase for aid of limited amount, to further support economy in context of coronavirus outbreak

State aid: Commission approves modification of Spanish schemes, including €10 billion budget increase for aid of limited amount, to further support economy in context of coronavirus outbreak

The European Commission has found the modification of three existing Spanish schemes to support the economy in the context of the coronavirus outbreak to be in in line with the State aid Temporary Framework.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The amendments we have approved today will help Spanish companies preserve economic activity in these difficult times by adapting and enhancing existing Spanish schemes already in force. For example, Spain has made use of the possibility under the State aid Temporary Framework to first grant repayable instruments that can be converted into grants, if it becomes necessary. We continue to work in close cooperation with Member States to find workable solutions to mitigate the economic impact of the Coronavirus outbreak, in line with EU rules.”

The Spanish schemes

The three modified and prolonged existing Spanish schemes are:

  • The first Spanish “umbrella” scheme, providing limited amounts of aid, guarantees on loans, subsidised loans and support for uncovered fixed costs to companies and the self-employed affected by the coronavirus outbreak, which was approved by the Commission on 2 April 2020 and subsequently amended on 24 April 2020, 22 October 2020, 11 December 2020 and 19 February 2021;
  • The second Spanish “umbrella” scheme, providing support for research and development, testing and production of coronavirus relevant products as well as wage subsidies and deferrals of tax and social security contributions, which was approved on 24 April 2020 and prolonged for the first time on 23 December 2020; and
  • The Spanish recapitalisation fund, which was approved on 31 July 2020 and prolonged for the first time on 23 December 2020.

All three schemes are prolonged until 31 December 2021.

For the first “umbrella” scheme, the following additional modifications are included, which reflect the conditions set out in the Temporary Framework:

  • A €10 billion increase in the budget for limited amounts of aid, from €3.65 billion to €13.65 billion;
  • Aid ceilings for limited amounts of aid are increased to €225,000 per company active in the primary production of agricultural products (previously €100,000); €270,000 per company active in the fishery and aquaculture sector (previously €120,000), and €1.8 million per company active in all other sectors (previously €800,000);
  • Authorities will be able to grant guarantees up to 8 years on newly issued subordinated debt instruments;
  • Authorities will be allowed to convert repayable aid instruments granted under the existing schemes, including guarantees issued by ICO on senior loans, into more favourable instruments such as grants until 31 December 2022, under the conditions and within the thresholds fixed in the Temporary Framework for limited amounts of aid. This will, in particular, allow the conversion of guarantees into grants as well as the extension of maturities of existing guaranteed loans and the conversion of existing guaranteed senior loans into participating loans.

For the two “umbrella” schemes, micro and small enterprises will be eligible for aid related to research development and innovation even if they were in difficulty already on 31 December 2019.

The Commission concluded that the schemes, as amended, remain necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, and contribute to fight the health crisis, in line with Article 107(3)(b) and Article 107(3)(c) TFEU and the conditions set out in the Temporary Framework.

On this basis, the Commission approved the measures under EU State aid rules.

Source: State aid:Commission approves modification of Spanish scheme (europa.eu)

Photo Credit : https://pixabay.com/fr/photos/l-argent-euros-de-tr%C3%A9sorerie-5581994/

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