State aid: Commission approves Polish recapitalisation scheme to enable up to €1.65 billion of capital support to SMEs and large enterprises affected by the coronavirus outbreak

The European Commission has approved a Polish recapitalisation scheme of up to €1.65 billion (PLN 7.5 billion) to support large enterprises and certain larger small and medium-sized enterprises (SMEs) 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 and 8 May 2020. The scheme is part of a wider Polish support programme, the so-called “Financial Shield for Large Enterprises”. The scheme, which will be managed by the Polish Development Fund, is part of the “Financial Shield for Large Enterprises”, a support programme set up by the Polish authorities which has an overall budget of approximately EUR 5.5 billion (PLN 25 billion). Under the scheme, the support will take the form of recapitalisation instruments, in particular equity instruments (acquisition of ordinary and preferred shares in public and private companies) and hybrid capital instruments (convertible bonds and loans). The Commission found that the scheme notified by Poland is in line with the conditions set out in the Temporary Framework. 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 set out in the Temporary Framework. On this basis, the Commission approved the measure under EU State aid rules. Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This recapitalisation scheme, with a budget of up to €1.65 billion, will enable Poland to further support companies affected by the coronavirus outbreak. It ensures that the State is sufficiently remunerated for the risk taxpayers assume, that there are incentives for the State to exit as soon as possible, and that the support comes with strings attached, including a ban on dividends, bonus payments as well as further measures to limit distortions of competition. We continue to work in close contact and cooperation with Poland, as with all Member States, to find workable solutions to mitigate the economic impact of the coronavirus outbreak, in line with EU rules.”