Commission approves extension of German scheme for subsidized loans to support economy in #Coronavirus outbreak

The European Commission has approved a German state aid scheme extending measures adopted on 22 March 2020 to support the economy in the context of the coronavirus outbreak. In particular, the extension enables support to be granted by other regional authorities and promotional banks not covered by the existing measures.

This scheme was approved under the state aid Temporary Framework to support the economy in the context of the COVID-19 outbreak adopted by the Commission on 19 March 2020. Germany notified to the Commission an additional support measure under the Temporary Framework, implemented through the German federal and regional authorities, and promotional banks. While the initial scheme was designed in a way that subsidised loans could only be granted by the German Kreditanstalt für Wiederaufbau ("KfW"), this new scheme now also allows other regional authorities and promotional banks to provide support along the same lines.

It enables the granting of loans at favourable terms to help businesses cover immediate working capital and investment needs. The objective of the measure is to provide companies with liquidity to continue their activities faced with the difficult situation caused by the coronavirus outbreak. The Commission found that the German measure is in line with the conditions set out in the Temporary Framework.

The Commission concluded that the measures are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a member state, in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework. On this basis, the Commission approved the measure under EU state aid rules.

Executive Vice President Margrethe Vestager, in charge of competition policy, said: "Managing the economic impact of the coronavirus outbreak requires that companies have sufficient liquidity to cover their investment needs and continue their activities. We have approved an extension to the German schemes for subsidized loans. With this scheme, also other public institutions can grant support to the German economy and complement actions by the Kreditanstalt für Wiederaufbau. We continue working with member states to ensure that national support measures can be put in place as quickly and effectively as possible, in line with EU rules.”

The full press release is available online. 

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