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.
Related Links
Keywords: Europe, EU, Belgium, Banking, COVID-19, SME, Temporary Framework, Credit Risk, State Aid Rules, Loan Guarantee, EC
Featured Experts
Victor Calanog, Ph.D.
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Related Articles
EBA Sets Out Work Priorities and Deliverables for 2021
EBA published its annual work program for 2021. The work program describes the activities and deliverables for the coming year in the context of the six key strategic areas of work.
PRA Proposes to Amend SS11/13 on Internal Ratings-Based Approaches
PRA is proposing, via the consultation paper CP14/20, to introduce two complementary expectations on the level of mortgage risk-weights in UK for banks applying the internal ratings-based approaches.
ECB Confirms Compliance of €STR with Financial Benchmark Principles
ECB published its statement of compliance with the IOSCO principles for financial benchmarks developed by IOSCO.
OSFI Updates Timelines for Implementation of IFRS 17
OSFI updated the timelines for implementation of IFRS 17 on insurance contracts.
IFRS Consults on Global Approach to Sustainability Reporting
IFRS launched a consultation to assess the demand for global sustainability standards.
EIOPA Sets Out Work Priorities for 2021-2023
EIOPA has set out the work priorities for 2021-2023, taking into account the current market situation in light of the COVID-19 pandemic.
US Agencies Finalize Three Interim Final Rules Issued Amid Pandemic
US Agencies (FDIC, FED, and OCC) finalized three interim final rules that were published in March and April this year to ease the impact of disruptions caused by the COVID-19 pandemic.
US Agencies Finalize Interim Final Rules Issued Amid Pandemic
US Agencies (FDIC, FED, and OCC) finalized two rules, which are either identical or substantially similar to the interim final rules in effect and issued earlier this year.
APRA Proposes to Increase Transparency of Banking Data
APRA announced that it is resuming consultation on the confidentiality of data submitted to APRA by the authorized deposit-taking institutions.
EIOPA Consults on Use of Risk Mitigation Techniques Under Solvency II
EIOPA is consulting on a supervisory statement on the use of risk mitigation techniques by insurance and reinsurance undertakings.
