The European Commission has approved a Croatian scheme worth €85.3 million to support large companies in the civil aviation sector affected by COVID-19, which was previously approved under the Interim Framework for Government Assistance.
According to the Commission, due to the coronavirus pandemic, Croatia, like other countries, was forced to impose various measures in order to prevent the spread of the virus, including travel restrictions. As a result, companies operating in the civil aviation sector suffered significant operating losses and suffered a significant drop in traffic and profitability, TheSchengen.com reports.
“The purpose of this measure is to support the beneficiaries’ activity, economic recovery and structural viability,” the statement said.
The EU Commission also stressed that based on this assistance, the public support will take the form of recapitalization through the issue of ordinary shares.
“The committee found that the Croatian scheme is in line with the conditions stipulated in the interim framework,” the statement explained.
The authority clarifies that the capital injection will not exceed the minimum necessary to ensure the sustainability of the beneficiaries, yet it will not exceed the restoration of their capital position compared to what it was before the Corona virus pandemic. In addition, shares will be issued to the state at market value.
The Commission confirms that this assistance will be provided no later than June 30, 2022.
Public support will also be provided subject to certain conditions in order to prevent distortion of unfair competition.
The European Union has also approved an existing Croatian scheme that will support companies active in the shipping, travel and infrastructure sectors affected by the coronavirus pandemic.
In this regard, Croatia announced changes to the current scheme that include an increase in the total budget by about 111.8 million euros and the expansion of financial intermediaries under the scheme to cover banks and all credit and financial institutions, including leasing companies.
The Commission concluded that this assistance will not exceed the amount of 2.3 million euros per beneficiary and, at the same time, will be provided no later than 30 June 2022.
In addition, the Committee concluded that the objective of this revised effort remains necessary, appropriate and proportionate to address a serious concern in the economy of a Member State, particularly Croatia in this case.
The commission had approved the original scheme on June 30, 2020, which was subsequently amended in six cases.