Brussels, 17/12/2008 (Agence Europe) - On Wednesday 17 December 2007, the European Commission adopted a temporary framework providing member states with additional possibilities to tackle the effects of the credit squeeze on the real economy. The framework relaxes, with immediate effect, restrictions on state aid for companies that do not have to be notified to the Commission and will last until the end of 2010.
Competition Commissioner Neelie Kroes told reporters in Brussels on Wednesday: "We must fight the crisis, not each other. State aid must be targeted at allowing companies, especially SMEs, to overcome financial problems arising from the current credit squeeze without worsening the situation for other companies, thereby aggravating the crisis. Together with the existing possibilities to support smart investment in sustainable growth, the new measures will give new opportunities to member states to bring the economy back on the right track." She added that the framework was part of the Economic Recovery Plan unveiled in November 2008.
The Commission explains that the initiative announced on Wednesday gives member states the freedom to decide on their own economic stimulus plans while ensuring equal treatment among member states and avoiding an uneven playing field.
The framework will facilitate the tackling of the current difficulties in the economy in order: 1) to ensure sufficient bank lending to companies; 2) to allow companies with liquidity problems due to the crisis to benefit from temporary relief through limited grants; and 3) to encourage companies to continue investing in a sustainable future, including the development of green products.
In order to meet these objectives, member states may grant, under certain conditions and until the end of 2010, measures such as: a lump sum of aid of up to €500,000 per company for the next two years, to help them get over current difficulties; state guarantees for loans at a reduced premium; subsidised loans, in particular for the production of green products (meeting environmental protection standards early or going beyond such standards) and risk capital aid of up to € 2.5 million per SME per year (instead of the current €1.5 million) in cases where at least 30% (instead of the current 50%) of the investment cost comes from private investors.
Based on member state reports, the Commission will evaluate whether the measures should be maintained beyond 2010, depending on whether or not the crisis is still ongoing. The Commission is considering the authorisation of national programmes as long as they comply with the new framework, whereby aid to companies would no longer have to be notified to the Commission. The framework can be found at: http: //ec.europa.eu/competition/state_aid/legislation/horizontal.html