The European Commission has approved, under EU State aid rules, a prolongation of the deadline for banks to provide new financing to companies under the European Guarantee Fund (‘the Fund’). The Commission approved the establishment of the Fund in December 2020 and its subsequent amendment in November 2021.
The Fund brings together support by Member States under the management of the European Investment Bank Group (‘EIBG’). Twenty-two Member States decided to participate in it (i.e. Austria, Belgium, Bulgaria, Croatia, Cyprus, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Lithuania, Luxemburg, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain and Sweden).
The Fund is aimed at addressing in a coordinated manner the financing needs of European companies, mainly small and medium-sized enterprises, affected by the coronavirus pandemic by providing guarantees on debt instruments and equity instruments. Until now, the deadline for banks to provide new financing to companies was 30 June 2022. The prolongation until 31 December 2022 will allow banks, which have already signed agreements with the EIBG, to include loans and other financing options under the Fund’s guarantee.
The Commission assessed the prolongation under EU State aid rules, in particular Article 107(3)(b) of the Treaty on the Functioning of the EU, which allows aid to be granted by Member States to remedy a serious disturbance in their economy. The Commission found that the prolongation is appropriate to allow banks to further address the financing needs of European companies.
The Commission concluded that this exceptional prolongation does not affect the compatibility of the Fund’s measures with the internal market. They, therefore, remain necessary, appropriate and proportionate to remedy a serious disturbance in the economies of the participating Member States. On this basis, the Commission has approved the prolongation under EU State aid rules.
The non-confidential version of the decision will be made available under the case numbers SA.102928, SA.102943, SA.102951, SA.102969, SA.102989, SA.103007, SA.103011, SA.103018, SA.103036, SA.103039, SA.103044, SA.103049, SA.103078, SA.103100, SA.103106, SA.103118, SA.103139, SA.103140, SA.103157, SA.103158, SA.103160 and SA.103165 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.