Commission approves Spanish, Italian coronavirus schemes

The Commission approved on Friday both Spanish and Italian plans to set up financial schemes to tackle the coronavirus crisis. The Spanish plan includes setting up a €10bn budget fund to invest through debt and equity instruments in companies affected by the coronavirus outbreak. The Italian schemes, with an overall budget of €6bn, consist of incentives to the recapitalisation by private investors of SMEs' affected by the outbreak.

“The coronavirus crisis has hit the Spanish economy hard. The Spanish Solvency Support Fund aims to unlock capital support of €10bn to Spanish companies by facilitating their access to finance in these difficult times. The scheme ensures that the state is sufficiently remunerated for the risk assumed by taxpayers.” Executive VP Margrethe Vestager said. “With these three schemes, Italy will  further support SMEs affected by the coronavirus outbreak by strengthening their capital base and facilitating their access to finance in these difficult times,” she added

Under the Spanish scheme, the support will take the form of debt and recapitalisation instruments. It will be available to companies only if no other appropriate solution is available and it is in the common interest to intervene. Furthermore, support is limited to the amount necessary to ensure the viability of beneficiaries and to restore their capital position to before the coronavirus outbreak, and the scheme provides an adequate remuneration for the state and it incentivises beneficiaries and/or their owners to repay the support as early as possible.

In Italy, the three approved schemes include  a subsidy associated with a tax credit, where private investors injecting capital in the affected companies will be entitled to receive a tax credit of up to 20% of the invested amount; a tax credit scheme, where the companies themselves would receive a tax credit of up to 30% of the amount of their capital increase; and public support under the form of subordinated loans. All schemes will be accessible to companies that have faced a severe reduction of revenues in March and April 2020, provided they approve and execute a capital increase.

Similar articles