EC Approves Belgian Guarantee Scheme to Support SMEs Affected by COVID
EC approved a Belgian federal loan guarantee scheme to support lending to small and medium-size enterprises (SMEs) affected by COVID outbreak. The support will take the form of state guarantees on new loans provided by banks and will complement the existing guarantee scheme approved by the EC on April 11, 2020. To fund the measure, Belgium has reallocated EUR 10 billion of the EUR 50 billion envelope earmarked for the previously approved guarantee scheme. The scheme was approved under the State aid Temporary Framework.
EC found that the Belgian measure is in line with the conditions set out in the Temporary Framework, as it relates to new loans with a maximum maturity of three years, will grant loans before the end of 2020, provides for appropriate remuneration of the guarantees, and contains adequate safeguards to ensure that the aid is channeled effectively by the banks to the beneficiaries in need. With the exception of micro and small companies, undertakings that were already in difficulty on December 31, 2020 are not eligible for aid under the scheme. EC concluded that the measure is necessary, appropriate, and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) the Treaty on the Functioning of EU and the conditions set out in the Temporary Framework. On this basis, EC approved the measure under EU State aid rules.
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Keywords: Europe, EU, Belgium, Banking, COVID-19, SME, Temporary Framework, Credit Risk, State Aid Rules, Loan Guarantee, EC
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