RIGA - The European Commission has approved Latvia's EUR 160 million loan guarantee program for exporting enterprises that have been affected by the Covid-19 crisis, LETA was told at the European Commission's Representation in Latvia.
The support measure has been approved in accordance with the EU's regulation for temporary government support intended to mitigate the crisis impact.
The support will be provided in the form of government loan guarantees, which will be made available to medium-sized and large enterprises whose exports exceed 30 percent of their annual turnover. The program is aimed at limiting the risks associated with lending to the exporting enterprises that have been hit by the pandemic's economic impact, thus helping them to continue operations and make investments necessary to maintain competitiveness in the wake of the Covid-19 crisis.
The European Commission has concluded that the Latvian program is in line with the EU's temporary regulations.
"Firstly, the program is limited in time. Secondly, it sets adequate guarantee levels. Thirdly, the loans receiving the guarantees are not bigger than the sum necessary to cover the recipients' liquidity needs caused by the Covid-19 outbreak. Fourthly, the program limits the risk taken by the government at 90 percent. Fifthly, it includes relevant safety measures ensuring that the banks effectively provide the support to recipients who really need it," representatives of the European Commission's Representation said.