State aid: Commission approves Irish support scheme for SMEs in difficulty

The European Commission has found a €10 million Irish aid scheme to facilitate the restructuring of small and medium sized companies (SMEs) in Ireland, to be in line with EU State aid rules.Under the scheme, which will run until 2020, Enterprise Ireland, an Irish Government Agency responsible for supporting businesses, will be entitled to offer restructuring support to SMEs in financial difficulty. In particular, the scheme will provide support if a company’s failure is likely to trigger job losses. It aims to avoid situations where value-creating and viable SMEs, with the potential to restore their competitiveness, are prevented from accessing finance from credit markets. The support will take the form of equity investments and will be available to SMEs active in all sectors of the economy, with the exception of the steel, coal and financial sectors. The scheme requires potential beneficiaries of the restructuring aid to: i) present a sound restructuring plan to ensure their long-term viability; ii) contribute at market terms to the restructuring costs – up to 40% of these costs in the case of medium-sized enterprises (up to 250 employees) or up to 25% of these costs in the case of small enterprises (up to 50 employees). Commissioner Margrethe Vestager, in charge of competition policy said: “Small and medium sized companies are the backbone of our economy and it is good that we have been able to endorse this Irish scheme to support SMEs that get into difficulties. These smaller companies employ a lot of people and this scheme should help them preserve jobs without unduly distorting competition.” The full press release is available online in ENFRDEGA.