Commission approves prolongation and modification of ISMEA calculation method for issuing direct guarantees at market conditions to companies active in agricultural, agri-food and fishery sectors

The European Commission has approved, under EU state aid rules, the modification of the Italian public guarantor ISMEA's (Istituto di Servizi Per il Mercato Agricolo Alimentare) methodology to calculate the fees on direct guarantees. The methodology, which was initially approved by the Commission in 2010 (in the decision SA.31584) and last amended in 2019 (SA.52895), enables ISMEA to grant free of aid guarantees, counter-guarantees and portfolio guarantees on loans to small and medium-sized enterprises active in the agriculture, agri-food, aquaculture and fisheries sectors.

Italy notified the following modifications to the scheme (i) the prolongation of the scheme until 31 December 2023; (ii) an increase of budget from €50 million in 2021 and 2022 to €250m in 2023; and (iii) a number of technical modifications including an extension of the scope of the guarantee, in terms of increased amount and increased coverage of the loan and in terms of eligible beneficiaries and transactions, in view of the increased budget.

Moreover, the revised methodology provides for a new a governance check linking the guarantee premium to the overall lending rate: if the overall lending rate is too high, the bank will be asked to lower its own lending rate. If no bank is willing to lower the lending rate, the required guarantee premium to be paid by the company will be increased, to make sure that it is in line with the conditions offered on the market. This will further ensure that the lending banks do not benefit from the aid in the form of the state guarantee. The Commission assessed the amended methodology under EU state aid rules, and in particular the Commission's Guarantee Notice that determines if financial guarantees constitute state aid or not. The Commission found that the amended methodology still ensures that the guarantee fee is market conform in the meaning of the Guarantee Notice.

On this basis, the Commission approved the methodology under EU state aid rules. The non-confidential version of the decision will be made available under the case number SA.100837 in the public case register on the Commission's competition website.

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