Commission authorises temporary Romanian guarantee scheme to boost real economy

The European Commission has authorised under EC Treaty rules on state aid a Romanian scheme aimed at providing relief to companies encountering financing difficulties as a result of the credit squeeze in the current economic crisis. rnrnThe scheme allows authorities to grant aid in the form of subsidised guarantees for investment and working capital loans concluded by 31 December 2010. The scheme meets the conditions of the Commission’s Temporary Framework for state aid measures to support access to finance in the current financial and economic crisis (see IP/08/1993 ), as amended on 25 February 2009, because it is limited in time, respects the relevant thresholds and applies only to companies that were not in difficulty on 1 July 2008. It is therefore compatible with Article 87(3)(b) of the EC Treaty, which permits aid to remedy a serious disturbance in the economy of a Member State.rnrnCompetition Commissioner Neelie Kroes said “The Romanian measure facilitates access for firms to loans. This is an effective way of encouraging business investment and economic recovery without unduly distorting competition.”rnrnThe Romanian authorities designed the scheme on the basis of the rules laid down in the Commission’s Temporary Framework on state aid to the real economy during the crisis (see IP/08/1993 ) and in particular the conditions for aid in the form of subsidised guarantees.rnrnThe reduction of the guarantee fee can be applied during a period of up to two years for loan guarantees contracted no later than 31 December 2010. Where the duration of the underlying loan exceeds two years, the safe-harbour premiums set out in the Annex to the Temporary Framework, as amended, may be applied for an additional maximum period of four years. The scheme does not apply to firms that were already in difficulty on 1 July 2008 (i.e. before the credit crunch).rn