April 7 (SeeNews) - The European Commission said on Tuesday that Croatia's recently adopted 6.0 billion kuna ($857 million/786 million euro) liquidity guarantee scheme that aims to support export companies affected by the coronavirus outbreak is in line with EU state aid rules.
"This Croatian guarantee scheme of approximately 790 million euro will support companies with a certain amount of export activities in these difficult times. We continue to work in close cooperation with member states to find workable solutions to mitigate the economic impact of the coronavirus outbreak, in line with EU rules," the Commission's executive vice-president in charge of competition, Margrethe Vestager, said in a statement.
The scheme was approved under the Commission's State Aid Temporary Framework that was adopted on March 19, 2020, and amended on April 3, 2020, the statement read.
Via the scheme, Croatia is to extend state-guaranteed loans to companies whose exports represent at least 20% of their annual revenue, aiming to limit the risk associated with issuing operating loans to those companies that are most severely affected by the economic impact of the coronavirus outbreak, thus ensuring the continuation of their activities.
The measures cover guarantees on operating loans with a limited maturity and size, and limit the risk taken by the state to a maximum of 50%, ensuring that the financing is available at favourable conditions and limited to those who need it, the Commission said.
They also involve minimum remuneration and safeguards to guarantee that the aid is effectively channelled by financial institutions to the beneficiaries in need.
"The Commission therefore concluded that the Croatian guarantee scheme for exporting companies will contribute to managing the economic impact of the coronavirus outbreak in Croatia. The measures are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State," the statement concluded.
(1 euro = 7.63133 kuna)