The European Commision said that, following extensive consultations with Member States and stakeholders, in July 2014 it adopted a series of instruments to ensure a simpler, more flexible and generous state aid framework which provides support to SMEs in zones close to civil strife or war. The European Commision was answering a question posed by EuroParliamentarian Alfred Sant on state aid to SMEs operating in zones like Ukraine and Libya.

The Commision said that the risk finance guidelines have been amended to enhance the incentives of private sector investors to increase their activities in SME financing. These guidelines go hand in hand with other EU initiatives designed to promote wider use of financial instruments in the context of new support programmes.

Alfred Sant asked whether the European Commision could consider waiving or amending state aid rules, when the governments of such Member States seek to apply national support measures, on a reasonable and transparent basis, in order to safeguard the continued existence of the SMEs concerned and their ‘traditional’ commercial relations with the territories in turmoil.
Sant said that trade and investment is being disrupted by acts of war and civil strife in territories close to the European Union (Ukraine, Libya), whilst SMEs in a number of Member States that have developed long-standing commercial relations with these territories (such as between Malta and Libya) are being so badly hit that they face the threat of closure under the current economic conditions.

The European Commision said it did not have specific rules dealing with loss of commercial possibilities due to war or civil unrest. However, if exploited to the maximum, this new framework should provide all the necessary tools to react to changing market realities, including by providing support to SMEs in situations as the ones mentioned by Alfred Sant.
The most flexible and easily deployable schemes allows Member States to grant up to EUR 200 000 for a rolling period of three years. For more targeted schemes, the wider range of block-exempted measures offer many options for SMEs to receive support without prior notification to the Commission.

Reacting to the EC’s reply, Alfred Sant said that it is encouraging that the Commision is alert on what might trigger difficulties on small and medium businesses, including Maltese enterprises that are being affected by the conflict in Libya. However, there is the need for a more flexible framework so that these enterprises will be given state aid. ‘It seems that the Commision is not understanding this fact thoroughly. More efforts are needed to convince the EC on this matter.’ Said the Maltese Europarliamentarian.