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The European Commission has approved an approximately €202 million (HRK 1.525 billion) Croatian State aid scheme to support companies of all sizes active in the sports and tourism sectors (and in directly related ones,

such as accommodations, restaurants) and , affected by the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework.

The Coatian support scheme.    The main purpose of the measure is to assist eligible companies in gaining access to liquidity and to preserve the continuity of their economic activity. The aid will be granted in the form of (i) guarantees on new working capital and investment loans; and (ii) subsidised interest rates for new loans. The total budget of the scheme is €202 million (HRK 1.525 billion).

The Commission found that the Croatian scheme is in line with the conditions set out in the Temporary Framework. In particular, the aid in the form of subsidised interest rates for new loans will not exceed €800,000 per undertaking. With regard to the aid in the form of guarantees on new working capital and investment loans, it either does not exceed €800,000 per undertaking, or (i) it relates to new loans with a maximum maturity of six years; (ii) the coverage of the guarantee is limited to 90% of the loan principal or to 35% in the case of first-loss guarantees; (iii) it provides for minimum remuneration of the guarantee; and (iv) it contains adequate safeguards to ensure that the aid is channelled effectively by the financial intermediaries to the beneficiaries in need.

The support will be granted until 30 June 2021 at the latest and only to companies that were not considered to be in difficulty on 31 December 2019, with the exception of micro and small companies that are eligible even if already in difficulty on 31 December 2019. Croatia will ensure compliance with the State aid rules on cumulation.

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

On this basis, the Commission approved the aid measure under EU State aid rules.