Today, the European Commission adopted a new framework of temporary measures to allow EU Member States to address current economic difficulties. The Commission set forth the following objectives:
- First, to ensure sufficient bank lending to companies;
- Second, to allow companies with liquidity problems due to the crisis to benefit from temporary relief through a limited grant; and
- Third, to encourage companies to continue investing into a sustainable future, including the development of green products.
In order to achieve these objectives, the Commission is allowing EU Member States to grant:
- A lump sum of aid up to €500,000 per company for the next two years, to relieve them from current difficulties
- State loan guarantees at a reduced premium
- Subsidized loans, in particular for the production of green products (meeting environmental protection standards early or going beyond such standards)
- Risk capital aid up to €2.5 million per SME per year (instead of the current €1.5 million) in cases where at least 30% (instead of the current 50%) of the investment cost comes from private investors.
All measures are limited until the end of 2010 and subject to conditions; however, the Commission will evaluate whether the measures should be maintained beyond 2010, depending on whether the crisis continues. Commenting on the new framework, Competition Commissioner Neelie Kroes said, "Together with the existing possibilities to support smart investment in sustainable growth, the new measures will give new opportunities to Member States to bring the economy back on the right track." In addition, the European Commission “expects the financial markets, and hence the provision of lending to businesses, to get back to normal in the foreseeable future.”
Aid schemes adopted by EU Member States must still be approved by the European Commission; however, “once schemes are approved, aid given to individual companies will not have to be notified.”
The Commission has provided more details of the framework here.