State aid: Commission approves modification of Spanish ‘umbrella’ scheme to further support economy in coronavirus outbreak

The European Commission has found the modification of a Spanish ‘umbrella’ scheme to support economy in coronavirus outbreak to be in line with the Temporary Framework. The existing scheme, providing guarantees on loans to companies and the self-employed affected by the coronavirus outbreak, was approved by the Commission on 2 April 2020 under case number SA.56851. Following the approval of the first amendment to the scheme on 24 April 2020 and the second amendment on 22 October 2020, Spain notified further modifications which allow final beneficiaries to request some changes to the terms of existing guaranteed loans granted under already authorised schemes or as de minimis aid. The changes to the terms of the guaranteed loans that can be requested are: (i) an extension of the initial period, during which no instalments of principal repayments have to be paid, for an additional 12 months, not exceeding an overall period of 24 months and/or (ii) an extension of maturity by a maximum of three years, up to a total of eight years. Spain foresees safeguards to ensure that the additional advantage drawn from these modifications is passed on to the final beneficiaries. Moreover, the amendments include the possibility to guarantee new refinancing operations for up to eight years. The Commission found that the amendments are in line with the conditions set out in the Temporary Framework. In particular, the extension of maturity to up to eight years implies the application of higher guarantee premiums in order to account for the additional years.  The aim of the further amendment is to ease financing conditions for the final beneficiaries to better address the protracted duration of the crisis, in line with the fourth amendment to the Temporary Framework, which clarified the possibility to modify existing guaranteed loans. The measures can be implemented until 30 June 2021. The Commission concluded that the scheme, as modified, is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of 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 amended scheme under EU State aid rules. 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.59196 in the State aid register on the Commission’s competition website.