The European Commission announced a temporary framework on state aid rules which is now being consulted with EU member states. Among others these would allow member states to introduce measures such as setting up schemes of direct grants or tax advantages of up to €500,000 to a company, subsidised state guarantees on bank loans and public and private loans with subsidised interest rates.
The framework also allows for airlines suffering damages due to the COVID-19 outbreak to receive compensation even if they have received rescue aid in the last ten years. In this case, the “one time last time” principle does not apply.
The Malta Business Bureau welcomed the European Commission initiative which acknowledges the state aid flexibilities required at this desperate time to save strategic companies such as airlines as well as thousands of small and medium enterprises facing unprecedented challenges to keep afloat.
MBB President Simon De Cesare stated, “Time is of the essence for these measures to be actioned immediately. The economic slump has come upon companies so swiftly that many businesses cannot cope, particularly as there is no end to this crisis yet in sight.”
Mr De Cesare added, “Our responsibility is to keep our customers and our employees safe, but also to safeguard their jobs and livelihoods. Companies on the front line like Tourism and tourism related sectors, are unable to do so without the necessary support nationally and at EU level. Companies are already having to deal with the huge burden of no income coupled with wages of employees who are unable able to work. Liquidity and access to finance are also essential in order to stabilise operations and resist the economic pain in the medium to long term. For this, we urge EU member states, particularly the Maltese Government to action these measures the earliest possible and roll them out widely to all affected companies. Small measures will not have the stabilizing effect the country needs right now.”
“I am confident that together we will win this fight. But we need the required support to keep casualties to a minimum. Only then could we start rebuilding and come out stronger,” Mr. De Cesare concluded.