State aid: Commission approves €665 million Greek scheme to protect primary residences of vulnerable borrowers affected by coronavirus outbreak

The European Commission has found a €665 million Greek scheme to support households that have been affected by the coronavirus outbreak to be in line with EU State aid rules. The current scheme will assist those households in repaying their mortgage loans, which are at risk of losing their primary residence following the coronavirus outbreak. Similar to a scheme that was approved by the Commission on 19 September 2019, the current scheme targets non-performing loans but additionally covers borrowers with performing loans. The State subsidy is for a maximum duration of nine months and has limitations as regards the amount.  Eligible for the scheme are homeowners affected by the coronavirus outbreak, who need to fulfil certain criteria in terms of income, wealth and the value of their primary residence. The Commission did not have to assess the direct support to the homeowners. Many of them do not fall under State aid control as they are considered natural persons or if they do (for example if they are self-employed), the amount granted would be significantly below the notification threshold. At the same time, the Commission found that the grant to the homeowners will provide an indirect advantage to the banks that issued the loans. Where homeowners with performing loans receive the subsidy, the Commission has assessed the indirect advantage as compatible in analogy with section 3.1 of the Temporary Framework (under Article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU)), which allows grants below EUR 800.000 per beneficiary on a temporary basis. The grants are subject to a few conditions, including safeguards that banks do not receive an undue indirect advantage. For homeowner’s non-performing loans, the Commission made an assessment similar to that of September 2019 under the Articles 107(2)(a) and 107(3)(c) TFEU. The Commission’s assessment further showed that the indirect aid would not create undue distortions of competition because the aid is limited to what is necessary to achieve its objective of ensuring that borrowers do not lose their primary residence. Moreover, since the scheme supports homeowners with loans at any bank operating in Greece, it is non-discriminatory among banks. More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.58555 in the State aid register on the Commission’s competition website