The Commission concluded that the Croatian programme is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State.

The European Commission has approved a Croatian programme of up to EUR 500 million to support businesses in the context of the Russian invasion of Ukraine. The scheme was approved under the Temporary Framework for State aid measures in crisis situations adopted by the Commission on 23 March 2022 on the basis of Article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU) and confirming that the Union economy is experiencing serious disturbances.

Croatian measure

Under the Temporary Framework, Croatia notified to the Commission a scheme to support enterprises in all sectors operating in Croatia up to a maximum of EUR 500 million in the context of the Russian invasion of Ukraine.

The measure will be available to companies in all sectors affected by the current crisis, with the exception of credit and financial institutions.

Under this measure, which will be implemented by the Croatian Bank for Reconstruction and Development (HBOR), the aid will consist of limited amounts or liquidity support in the form of: direct loans, (ii) subsidised loans or (iii) interest rate subsidies.

The programme is one of a series of measures by the Croatian state to remedy a serious disturbance in its economy. This measure aims to encourage private banks to lend to companies that are severely affected by the current geopolitical situation in a period of severely disrupted market functioning.

The Commission found that the Croatian scheme complies with the conditions set out in the Temporary Framework. In particular, as regards limited amounts of aid, they shall: shall not exceed EUR 35 000 per undertaking active in agriculture, fisheries or aquaculture or EUR 400 000 per undertaking in any other sector; and (ii) shall be allocated by 31 December 2022 at the latest.

As regards liquidity support in the form of subsidised loans, the maximum amount per beneficiary is: 15 % of the average total annual turnover it has achieved in the last three closed accounting periods; or (ii) 50 % of energy costs during the 12 months preceding the submission of the aid application.

Furthermore: the maturity of the loans is limited to six years, (ii) the annual interest rates of the loans respect the minimum levels set out in the Temporary Framework, (iii) loans are provided for investment or working capital, and (iv) loan agreements will be signed no later than 31 December 2022.

Exceptionally, for companies operating in sectors particularly severely affected by the direct or indirect consequences of the current geopolitical crisis and related sanctions, the amount of the loan may be increased to cover their liquidity needs: for a period of 12 months in the case of a small or medium-sized enterprise, and (ii) for a period of six months in the case of a large enterprise.

In addition, public support is subject to conditions that limit undue distortions of competition. For loans through financial intermediaries, this includes safeguards aimed at transferring the benefits of the measure as much as possible to the final beneficiaries.

The Commission has concluded that the Croatian scheme is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State in accordance with Article 107(3)(b) TFEU and the conditions set out in the Temporary Framework.

It therefore approved this aid measure on the basis of EU State aid rules.

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