State Aid: Commission approves €350 million guarantee scheme for Malta to support economy during the coronavirus outbreak

The European Commission has approved a State Aid Scheme for Malta with an estimated budget worth €350 million, in order to help support the sectors of the Maltese economy affected by the COVID-19 pandemic. This scheme was approved under the Temporary Framework for State Aid measures to support the economy in the current COVID-19 outbreak.

This Temporary Framework adopted by the Commission allows Member States to use full flexibility foreseen under State aid rules to support the economy during the outbreak of the Coronavirus disease.

The Commission expressed that these measures are necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, which are in line with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework.

Malta notified to the Commission under the Temporary Framework a guarantee scheme for working capital loans granted by commercial banks to support companies affected by the COVID-19 outbreak. The €350 million Maltese scheme shall help businesses in Malta cover immediate working capital needs and aid in continuing their activities during these troubling times.

The Commission found that the Maltese measures are in line with the conditions set out in the Temporary Framework, particularly:

  1. The underlying loan amount per company is linked to cover its liquidity needs for the foreseeable future,
  2. The guarantees will only be provided until the end of this year,
  3. The guarantees are limited to a maximum of six years, and
  4. Guarantee fee premiums do not exceed the levels foreseen by the Temporary Framework.

Moreover, the Temporary Framework mentioned above, offers five types of aid which Member States can make use of. These include:

  1. Direct grants, selective tax advantages and advanced payments – schemes of up to €800,000 may be granted to a company to address urgent liquidity needs;
  2. State guarantees for loans taken by companies from banks – State guarantees will be provided to guarantee that banks keep providing loans to the customers who require them;
  3. Subsidized public loans to companies with favorable interest rates to help businesses cover immediate working capital and investment needs;
  4. Safeguards for banks that channel State aid to the real economy; and
  5. Short–term export credit insurance.

The Temporary Framework will be in place until the end of December 2020. Should you have any queries on the Temporary Framework and how to benefit from the State Aid Scheme granted to Maltese businesses in order to tackle the economic impact of the COVID-19 pandemic please send an email to