State aid: Commission approves amendment to Greek aid scheme aiming to protect primary residences of vulnerable borrowers affected by coronavirus outbreak

The European Commission has found the modifications of an existing Greek aid scheme aiming to support households affected by the coronavirus outbreak to be in line with EU State aid rules. The purpose of the existing scheme, approved by the Commission on 13 November 2020 (SA.58555), is to assist in repaying their mortgage loans those households that are at risk of losing their primary residence following the coronavirus outbreak. Greece notified the following modifications to the existing scheme: (i) a three-month extension of the loan support period from nine to twelve months, and (ii) a reduction of the maximum aid amount per beneficiary (between 33% and 40% lower compared to the last quarter of subsidies deployed under the existing scheme). The other elements of the scheme will remain unchanged.  As for the existing aid scheme, the Commission found that the grant to the homeowners under the amended scheme 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 of up to €1.8 million per beneficiary. This is subject to  safeguards, including that banks will not receive an undue indirect advantage. For homeowner’s non-performing loans, the Commission made an assessment under the Articles 107(2)(a) and 107(3)(c) TFEU, recognizing the social character of the aid. The Commission’s assessment further showed that the indirect aid would not create undue distortions of competition because it is limited to what is necessary to achieve the objective of ensuring that borrowers do not lose their primary residence. Moreover, the amended scheme is non-discriminatory among banks and supports homeowners with loans at any bank operating in Greece. 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.100197 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.