State aid: Commission approves Latvian guarantee scheme to support mid-sized and large exporting undertakings affected by coronavirus outbreak

The European Commission has approved a Latvian guarantee scheme to support undertakings with export activities affected by the coronavirus outbreak. The scheme is expected to provide for guarantees going up to €160 million. The measure was approved under the State aid Temporary Framework. The support, in the form of State guarantees on loans, will be accessible to mid-sized and large undertakings whose exports represent more than 30% of their annual turnover. The scheme aims at limiting the risk associated with issuing loans to exporting companies affected by the economic impact of the coronavirus outbreak, thus helping them to continue their activities and to carry out the investments necessary to maintain their competitiveness following the outbreak. The Commission found that the Latvian scheme is in line with the conditions set out in the Temporary Framework. In particular, (i) it is limited in time; (ii) it provides for adequate remuneration of the guarantees; and (iii) the supported loans are limited to the amount that is needed to cover the beneficiaries’ liquidity needs resulting from the coronavirus outbreak; (iv) it limits the risk taken by the State to a maximum of 90%; and (v) contains adequate safeguards to ensure that the aid is effectively channelled by the banks to the beneficiaries in need. The Commission concluded that the measure 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 of the Temporary Framework. On this basis, the Commission approved the measure under EU State aid rules. 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.57655 in the State aid registeron the Commission’s competition website once any confidentiality issues have been resolved.