Government and Parliament should engage in a road race to pass as soon as possible the amending law on the issuance of government guarantees to banks for the granting of loans to companies and self-employed. The baton in the sprint will be received by the banks to proceed with the disbursement of the loans. Speed is necessary as the loans must be approved by the banks by 31/12/2021.
The time frame is narrow and is included in the decision of the Directorate-General for Competition of the European Commission approving the granting of state guarantees amounting to 1 billion euros. The amendment of the legislation became necessary due to the comments of the Directorate-General for Competition, but also to the opinion of the European Central Bank, which is why it amended the basic law on issuance.
The amendment of the law is mandatory as it is a condition of the European Commission. The Ministry of Finance announced yesterday that the relevant bill has been prepared and the plan to grant state guarantees will be implemented with the passage of the amending law and the issuance of the decree by the Minister of Finance.
The amendments concern the composition and role of the Loan Concession Monitoring Committee. The EU wants to ensure the independence of the banks, so the Central Bank will not participate in the Commission.
Plan
The purpose of the plan is to provide government guarantees totaling up to one billion euros to banks in order to provide new low-cost loans to companies and self-employed.
The proposed bill provides for government guarantees to be distributed as follows:
(i) Three hundred million euros (€ 300,000,000) for the issuance of loans to self-employed and very small businesses.
(ii) Five hundred and fifty million euros (€ 550,000,000) for the issuance of loans to small, medium and large enterprises.
(iii) One hundred and fifty million euros (€ 150,000,000) for the issuance of loans to large companies.
Government guarantees will not be used to repay existing credit facilities either serviced or non-serviced or during the restructuring of existing credit facilities of any credit institution.
Government guarantees will cover 70% of the losses that may arise from the above loans and banks the remaining 30% regardless of whether the loan is secured or not.
The loans will last from 3 months up to 6 years excluding current accounts whose maximum duration will be 1 year. The issuance of current accounts and / or loans without any collateral does not exceed 50% of the amount issued to a self-employed and very small enterprise, 30% to a small and medium enterprise and 20% to a large enterprise.
Finally, low interest rates are set for the new loans that will be granted.
