The European Commission has approved the amendments to existing German umbrella schemes, including their prolongation and an up to €45 billion overall budget increase, to support companies in the context of Russia's war against Ukraine.
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The Commission has approved, under the Temporary Crisis Framework, the amendments to existing German umbrella schemes, including their prolongation and an up to €45 billion overall budget increase, to support companies in the context of Russia's war against Ukraine.
The existing schemes are: an umbrella scheme (i.e. a scheme administered by federal, regional and local authorities) approved by the Commission on 19 April 2022; and an umbrella scheme under which the aid takes the form of guarantees on loans (‘guarantee scheme') and subsidised loans (‘subsidised loan scheme'), that the Commission approved on 4 May 2022.
Both schemes have been amended on 18 August 2022.
Germany notified, among others, the following modifications of the existing schemes: an extension of the period in relation to which aid may be granted, until 31 December 2023; and the introduction of the possibility to convert debt instruments, such as loans and guarantees, into other forms of aid, such as direct grants.
When it comes to limited amounts of aid in particular, Germany notified an increase of the maximum aid ceilings, in line with the Temporary Crisis Framework as amended, resulting in an overall budget increase by up to €45 billion; and the introduction of the possibility to channel the aid through an energy supplier.
For the guarantee scheme, the amendments aim at introducing the following options: public guarantees may exceptionally cover bank guarantees; and large companies may obtain guarantees to cover their liquidity needs derived from trading activities on energy markets for a 12-month period following the granting of the aid.
In both cases, these new options may only be put in place when the guarantees are aimed at addressing the liquidity needs arising from collateral requirements on trading activities on energy markets.
Lastly, for the subsidised loan scheme, the amendments aim at adjusting the base rate applicable for the calculation of the reduced interest rates. ■