The EC has adopted a temporary framework for State aid to help Member States address the exceptional difficulties of companies to obtain finance in the current financial and economic situation. In particular, the framework enables Member States to grant the following types of aid, under certain conditions, until the end of 2010:
State aid unit have produced a summary of the framework and the full version can be found here.
Any measures introduced under the framework must be in the form of a scheme, and be notified to the European Commission. The UK has 4 schemes approved under the measure which enable aid to be provided at a country, regional and local level by relevant aid administrators :-
Small amounts of compatible aid (N 43/2009) This scheme enables aid of up to €500,000 per undertaking to be awarded provided the conditions of the framework (section 4.2 in particular) are met. A note setting out conditions which apply to the scheme can be accessed here, with fuller details contained in the scheme approval and framework itself.
Temporary Aid in the Form of loan guarantees (N 71/2009) enables guarantees to be given at a subsidised annual premium. A reduction in the grant premium can be offered for a maximum of 2 years. The methodology used for the calculation of guarantees should be that provided in the EC’s safe harbour provision, with a reduction of up to 25% for SMEs, and up to 15% for large companies.
Full conditions are set out in 4.3 of the Temporary Framework.
Temporary Aid for the Production of Green Products (N 72/2009) allows subsidised interest rates for investment in environmental products. The subsidised rate can be applied for a maximum of 2 years following the granting of loan towards production of new products which significantly improve environmental protection or which involve early adaptation or going beyond community standards. The interest rate should be calculated using the methodology set out in the framework (para 4.4.2 & 4.5.2) with a reduction of up to 50% for SMEs, and 25% for large companies. Full conditions are set out in section 4.5 of the Temporary Framework.
Aid in the form of Subsidised Loans (N 257/2009)
This scheme is open to all sectors of the economy and applies to loan contracts concluded from the date of the Commission approval (14 May 2009) to 31 December 2010. The reduced interest rates may be applied for interest payments due before 31 December 2012. Details of the scheme can be found here.
The relevant conditions, record keeping and reporting requirements set out in the framework must be applied to provide aid under these schemes. Please contact the State aid Unit for further information.
To assist with reporting requirements Scottish public bodies intending to provide aid under any of these schemes should contact the State Aid Unit.