Coronavirus - Aid
In order to compensate for the negative economic impact of coronavirus (COVID-19) on the European economy, the European Commission has announced financial aid of up to EUR 25 billion under the planned "Corona Response Investment Initiative". A portion of EUR 7.5 billion is to be available as emergency aid. To this end, the Commission plans to relinquish its obligation to request refunding of unspent pre-financing for European structural and investment funds currently held by the Member States. The President of the European Commission, Ursula von der Leyen, announced her intention to present guidelines by the end of the week on how budget and state aid rules can be used flexibly.
Austrian authorities are also already reacting and providing for special subsidies to cushion businesses from the coronavirus fallout. In doing so, however, the requirements of EU state aid law must be observed, in particular the General Block Exemption Regulation (GBER) and the de minimis Regulation. To be considered free of aid, guarantees must meet the criteria of the Commission Notice on the application of Articles 87 and 88 of the EC Treaty to State aid in the form of guarantees, according to which a guarantee does not constitute aid if a certain minimum margin (which varies according to the financial rating of the given company) is charged. Below is a brief overview of the measures announced:
- Austria Wirtschaftsservice Gesellschaft mbH (aws, Austrian promotional bank): The programme "Bridge-Finance-Guarantees due to the Corona Virus Crisis" with a volume of up to EUR 10 million provides support for liquidity bottlenecks caused by loss of sales as a result of the corona virus and is intended to provide interim financing of measures (e.g. short-term adjustment of supply chains and customer relations). Funding will be provided for working capital financing (e.g. purchases of goods, personnel costs) to financially sound small-scale and industrial SMEs (companies in the tourism and leisure industry are excluded). The guarantee can be used to secure up to 80% of a bridging loan of up to EUR 2.5 million per SME. The term of the bridging loan is max. 5 years. The programme is being implemented on the basis of the aws Directive for SMEs, with a focus on the "Bridge-Finance-Guarantees due to the Corona Virus Crisis". Applications for affected individual entrepreneurs/SMEs (except tourism) are possible at https://www.aws.at/aws-garantie/ueberbrueckungsfinanzierungen/.
- Federal Ministry of Agriculture, Regions and Tourism and Österreichische Hotel- und Tourismusbank (ÖHT): SMEs in the tourism and leisure industry, which are expecting a 15% decline in sales compared to the same period of the previous year due to the coronavirus crisis, are to be given quick and unbureaucratic access to reduced-interest loans. Guarantees will be made available to tourism businesses so that they can take up bridging loans from their banks. The costs usually incurred for such guarantees (one-off processing fee of 1% and guarantee commission of 0.8%) are fully covered by the Federal Ministry of Agriculture, Regions and Tourism. The bridging loan can amount to a maximum of EUR 500,000 (secured with a federal guarantee ratio of 80%). The volume of liability made available by the Federal Government for this special campaign amounts to EUR 100 million. Since Wednesday 11 March 2020, 3 p.m., affected tourism businesses can submit applications at www.oeht.at.
Please note: This newsletter merely provides general information and does not constitute legal advice of any kind from Binder Grösswang Rechtsanwälte GmbH. The newsletter cannot replace individual legal consultation. Binder Grösswang Rechtsanwälte GmbH assumes no liability whatsoever for the content and correctness of the newsletter.
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