Brussels, 20th March 2009
State aid: Commission authorises temporary Belgian scheme allowing subsidised state guarantees to boost real economy
The European Commission has authorised under EC Treaty rules on state aid a Belgian scheme aimed at providing relief to companies in Flanders encountering financing difficulties as a result of the credit squeeze in the current economic crisis. The scheme, put in place by the Flemish Ministry of Economic Affairs, provides aid in the form of subsidised guarantees for investment and working capital loans concluded by 31 December 2010. The scheme meets the conditions of the Commission’s Temporary Framework for state aid measures to support access to finance in the current financial and economic crisis (see IP/08/1993), as amended on 25 February 2009, because it is appropriate to remedy a serious disturbance in the entire Belgian economy, is limited in time, respects the relevant thresholds and applies only to companies that were not in difficulty on 1 July 2008. It is therefore compatible with Article 87(3)(b) of the EC.
Competition Commissioner Neelie Kroes said "I am satisfied that this measure facilitates the access of firms affected by the credit crunch to investment and working capital loans, and represents an effective way of encouraging business investment and economic recovery, without unduly distorting competition."
The Flemish authorities designed the scheme on the basis of the rules laid down in the Commission's Temporary Framework on state aid to the real economy during the crisis (see IP/08/1993) and accepted in particular the conditions for aid in the form of subsidised guarantees. The reduction of the guarantee fee can be applied during a period of up to 2 years for loan guarantees contracted no later than 31 December 2010. Where the duration of the underlying loan exceeds 2 years, the safe-harbour premiums set out in the Annex to the Temporary framework, as amended, may be applied for the remaining period of the guarantee. The maximum duration of guarantees granted under the scheme is limited to five years. The scheme does not apply to firms that were already in difficulty on 1 July 2008 (i.e. before the credit crunch).
In view of the importance of Flanders for the overall Belgian economy, the Commission considers that the scheme can be approved under Article 87 (3)(b) of the EC Treaty even though it is proposed at regional level. Flanders represents more than 55% of the Belgian GDP, and more than 80% of Belgian exports, and the Belgian authorities demonstrated that the scheme is necessary, proportional and appropriate to remedy a serious disturbance in the entire Belgian economy.
The decision will be published in the State Aid Register on DG Competition’s website, under the reference number N 117/2009. The latest decisions on state aid published in the Official Journal and on the website are listed in the electronic newsletter State aid Weekly e-News.