European Commission approves €15 billion Austrian liquidity scheme to support the economy in the coronavirus outbreak

New Delhi: The European Commission has approved a €15 billion Austrian liquidity scheme to support the economy in the context of the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April 2020.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “We approved a €15 billion Austrian scheme for grants and guarantees on loans for companies affected by the coronavirus outbreak. The objective of the measures is to provide companies with liquidity to continue their activities in these difficult times. 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 Austrian support measures

Austria notified to the Commission under the Temporary Framework an Austria-wide liquidity scheme, with an estimated budget of €15 billion, and allows for the provision of aid in the form of:

(i) Direct grants, repayable advances and guarantees with a maximum of €800 000;

(ii) State guarantees for loans subject to safeguards for banks to channel State aid to the real economy;

(iii) Subsidised public loans to companies, with favourable interest rates.

The measure allows aid to be granted by COFAG (COVID-19 Finanzierungsagentur des Bundes GmbH).COFAG is a special purpose vehicle to grant liquidity assistance measures.

The measure is targeted at all undertakings and applies to the whole territory of Austria. Aid is granted under the measure either directly or, if it concerns guarantees on loans or subsidised public loans, through credit institutions and other financial institutions as financial intermediaries.

The Commission found that the Austrian measure is in line with the conditions set out in the Temporary Framework. In particular, the scheme foresees a mechanism to ensure that where these programmes are channelled through commercial banks, the latter pass the advantage on to the companies that need support. Furthermore, aid may be granted under the measure only to undertakings that were not already in difficulty on 31 December 2019. Finally, aid can be granted only until the end of this year.

The Commission therefore concluded that the Austrian measure will contribute to managing the economic impact of the coronavirus in Austria.It is 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 measures under EU State aid rules.