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Liquidity Measures
State AID

Liquidity Measures

€40b Emergency Financing Package

EU Measure

The European Investment Bank has announced an emergency funding package to consist of:

  • €20b of financing to be deployed in the form of dedicated guarantee schemes to banks;
  • €10b in liquidity lines to banks to ensure working capital for small and medium sized businesses; and
  • €10b in asset-backed securities purchasing programmes.
 
Eligibility

Small and mid-sized European businesses.

Further eligibility requirements to be announced.

 
Supervising Authority

European Investment Bank

Further guidance about the scheme is available here .

Details of how to apply to be announced.

 
Availability

To be announced

€25b Guarantee Fund

EU Measure

The European Investment Bank has announced that it will create a €25b guarantee fund, to be funded by EU member states.

The guarantee fund will allow the European Investment Bank to guarantee up to €200b of loans to businesses struggling due to the outbreak of COVID-19.

 
Eligibility

Private sector businesses in EU member states.

The guarantee fund will be used to:

  • provide guarantees to commercial banks;
  • provide guarantees to national guarantee schemes;
  • provide counter-guarantees to national promotional institutions;
  • provide support to small and medium sized businesses funded by venture capital funds;
  • purchase asset-backed securities from banks so that they can provide new loans to small businesses; and
  • provide financing to high-growth companies.

Further eligibility requirements to be announced.

 
Supervising Authority

European Investment Bank

Further guidance about the scheme is available here .

Details of how to apply to be announced.

 
Availability

To be announced

€5.2b Response Package

EU Measure

The European Investment Bank has announced that it will provide a €5.2b response package to tackle the COVID-19 pandemic outside of the EU.

 
Eligibility

The European Investment's Bank support package will involve:

  • Financing and technical assistance to partners in 100 countries; and
  • Short term health and business investment in Africa, Eastern and Southern Neighbourhood Countries, Western Balkans, Asia, and Latin America.
 
Supervising Authority

European Investment Bank

Further guidance about the scheme is available here.

 
Availability

To be announced

Pandemic Emergency Purchase Programme (PEPP)

EU Measure

The European Central Bank (ECB) has launched a €750b temporary asset purchase program of private and public sector securities.

 
Eligibility

Asset categories eligible to be purchased under the PEPP are the same as under the ECB’s existing asset purchase programme, being:

Additionally, the ECB has indicated that it intends to:

  • expand the range of eligible assets under the CSPP to non-financial commercial paper, thereby making all commercial paper of “sufficient credit quality” eligible for purchase under the CSPP; and
  • expand the scope of “Additional Credit Claims” (debt securities which are not tradable bonds) which can be acquired under the PEPP.
 
Supervising Authority

European Investment Bank

Further guidance about the scheme is available here.

 
Availability

26 March 2020 to end of 2020 (or until such time as the ECB determines the COVID-19 pandemic to be over)

ECB Refinancing Operations

EU Measure

The ECB has announced that it will be making up to €3 trillion in liquidity available at a refinancing rate of -0.75%.

 
Eligibility

Eligibility requirements to be announced.

 
Supervising Authority

European Central Bank

The ECB's press release about this scheme is available here.

Details of how to apply to be announced.

 
Availability

To be announced

State AID

Exceptional occurrence (Article 107(2)(b) TFEU)

EU Measure

COVID-19 outbreak qualifies as an “exceptional occurrence” meaning EU Member States can compensate companies in economic sectors that have been adversely affected by the pandemic.

Aid to remedy a serious disturbance to the economy under the Temporary Framework (Article 107(3)(b) TFEU)

A Temporary Framework has been implemented mid-March and updated two times already to facilitate expedited approval by the Commission of measures proposed by Member States within the scope of this framework. The Temporary Framework provides for several categories of state aids (which may be expanded);

  • aids facilitating access to liquidity (direct grants, selective tax advantages, repayable advances or equity; State guarantees for loans; subsidised interest rates for loans; short-term export credit insurance).
  • aids to accelerate research, testing and production of COVID-19 relevant products
  • aids that aim at protecting jobs in sectors and regions adversely affected (deferrals of tax payments and/or suspensions of social security contributions; aid in the form of wage subsidies for employees to avoid lay-offs)
  • the second amendment (8 May) enables public interventions in the form of recapitalisation aid to non-financial companies. Member States can also provide subordinated debt to companies at favourable terms.

Companies facing liquidity needs and/or bankruptcy (Article 107(3)(c) TFEU)

Member States can rely on the Rescue Aid and Restructuring Guidelines to grant urgent and temporary assistance to companies facing liquidity needs or bankruptcy due to the COVID-19 outbreak. These (pre-existing) rules have been loosened to provide more flexibility.

Further guidance about state aid rules during the outbreak (incl. temporary framework) is available here.

 
Eligibility

Eligibility criteria are determined by individual Member States who are responsible for granting the aids within the ambit of the Temporary Framework.

As far as recapitalization measures are concerned, on top of safeguards put in place by the European Commission to avoid undue distortions of competition in the Single Market Member States may condition recapitalization to additional conditions to meet policy objectives (green and digital transformation preventing fraud, tax evasion or tax avoidance).

 
Supervising Authority

The European Commission must approve the public support schemes/aids.

The European Commission has also approved individual aids, such as the €7b French scheme to support Air France.

Note: A number of measures are not considered state aids (e.g. financial measures directed to all companies, etc.) or are exempted (e.g. de minimis support). Individual Member States can take these measures without prior notification to the Commission.

 
Availability

The Temporary Framework is already in place will be in principle until the end of December 2020 (and until the end of June 2021 for recapitalisation measures only)

To date, the Commission has authorized more than 100 public schemes from all the Member States under the Temporary Framework for an estimated €1.9 trillion.

A tracker of the national measures approved is available here.

Note: first legal actions against sate aids have started.