A Maltese state aid scheme worth €350 million has been approved by the European Commission, paving the way for a temporary support system for a Maltese economy hit by the COVID-19 coronavirus outbreak.

The measures have been described as “necessary, appropriate and proportionate” to meet the challenges this pandemic has brought to the island’s economy, with major industries like hospitality being greatly impacted as restaurants, clubs and hotels remain restricted or shut down.

“This €350 million Maltese scheme will enable public guarantees on loans to support the Maltese economy during the coronavirus outbreak. It will help businesses cover immediate working capital needs and continue their activities in these difficult times. We continue working closely with Member states to ensure that national support measures can be put in place in a timely, coordinated and effective way, in line with EU rules,” Margrethe Vestager, executive vice-president in charge of competition policy, said.

With a budget of €350 million, Maltese companies can access working capital loans via commercial banks.

Several key conditions are linked with the funds to keep the scheme in line with the European Commission’s conditions. For example, guarantees will only be provided until the end of 2021, and are limited to six years maximum.

The approval comes as the Commission adopts a ‘temporary framework’ to enable EU member states to utilise the full flexibility given under state aid rules to support economies in the context of the coronavirus outbreak.

What do you think of this scheme?