The Croatian government will soon have available an amount of approximately €202 million to support companies of all sizes in the sectors of tourism and sports, including accommodations and restaurants, which have been affected by the Coronavirus pandemic.
The European Union Commission has approved the amount for the Croatian State aid scheme to support the sectors of tourism and sports affected by the pandemic, under the Croatian State aid scheme.
Commenting on the decision to allocate €202 million for Croatia, the Executive Vice-President Margrethe Vestager, in charge of competition policy, noted that the pandemic has hit hard Croatian companies in the tourism and sports sectors.
“This Croatian scheme will facilitate these companies’ access to liquidity in these difficult times and will help ensure the continuity of their economic activity,” he said, assuring that the Commission will continue working closely with the Member States in order to find solutions that help to ease the economic impact of the pandemic.
Once the financial means are admitted by the Croatian government, they will be able to allocate the aid in the following forms:
- guarantees on new working capital and investment loans, which should either not exceed €800,000 per undertaking, or:
- relate to new loans with a maximum maturity of six years
- the guarantee coverage is limited to 90 per cent of the loan principal or to 35 per cent in the case of first-loss guarantees
- it provides for minimum remuneration of the guarantee
- it contains adequate precautions to ensure that the aid is distributed effectively by the financial intermediaries to the beneficiaries
- subsidised interest rates for new loans (which should not exceed €800,000 per undertaking)
“The support will be granted until June 30, 2021, at the latest and only to companies that were not considered to be in difficulty on December 31, 2019, with the exception of micro and small companies that are eligible even if already in difficulty on December 31, 2019,” the Commission highlights in a press release, adding that Croatia will ensure compliance with the State aid rules on cumulation.
The Commission approved the aid measure according to the EU State aid rules after asserting that the measure is appropriate, necessary and proportionate to help recover the serious damage caused to the economy of a Member State by the pandemic.
EU’s Temporary Framework has been adopted by the Commission in order to enable the Member States to support their economies amid the outbreak.
The framework has been amended four times in total, on April 3, May 8, June 29, and October 13, 2020, and provides the Member States with financial means in order to aid companies affected by COVID-19, in several forms like direct grants, equity injections, selective tax advantages and advance payments, state guarantees, subsidised public loans to companies, etc.
Previously in December, the Commission approved €650 million aid dedicated to LOT airlines, a major network airline in Poland and Central Europe based in Warsaw, as a COVID-19 relief under the State aid Temporary Framework.
It has also approved the allocation of a total of €106.7 million of recovering aid and €30.2 million compensation for the French airline Corsair, to help the company’s restructuration, and to help it get out of the current crisis it has suffered due to the pandemic.