EC approves expansion of Italian aid scheme

Belgium, (Brussels Morning Newspaper) The European Commission approved amendments to the Italian aid scheme aimed at helping companies weather the crisis.

In a statement released on Tuesday, the Commission pointed out that approved amendments include a budget increase of up to 23 billion euro, stressing that the overall budget will remain below 33 billion.

Under the scheme first approved in July this year, Italy will provide guarantees to companies to help them cope with rising energy prices.

Besides the overall budget increase, the Commission noted that amendments include extending the deadline for providing aid to the end of 2023.

In addition, Italy will provide guarantees to cover liquidity needs of small and medium-sized enterprises (SMEs) for up to 12 months or up to 6 months for larger companies.

Amendments in line with rules

The EC stressed that the amended scheme is in line with EU rules as maturity of loans does not exceed 8 years, interest rates on loans are above the minimum allowed under the Temporary Crisis Framework and the money will be provided by the end of 2023.

The Commission added that the scheme is appropriate, proportionate and necessary to address economic disturbances in Italy, which is why it approved the amendments.

The body reminded that it adopted the Temporary Crisis Framework in March this year and amended the rules in July and October to help EU member states support their economies through the crisis.

Under the framework, bloc members can provide limited amounts of aid to companies in the form of subsidised loans and state guarantees to cover their liquidity needs.

In addition, EU member states may provide compensation for rising energy prices, with the EC stressing that this aid can be granted in any form.

“In exceptional cases and subject to strict safeguards, member states may provide to energy utilities for their trading activities public guarantees exceeding 90% coverage, where they are provided as unfunded financial collateral to central counterparties or clearing members,” the Commission added.

The body reminded that the Temporary Crisis Framework will remain in place until the end of 2023 and concluded that it will assess the need for extending the duration as needed.