The European Commission has approved a €1 billion Cypriot scheme to support enterprises and self-employed individuals in the context of the coronavirus outbreak, a press release said on Tuesday.

“The support will take the form of State guarantees on new loans. The measure will be open to companies active in all sectors (except the financial sector). The aim of the scheme is to provide liquidity for viable companies which experienced business disruption due to the coronavirus outbreak,” the press release read.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said that the “scheme will help these companies address the liquidity shortages they face due to the ongoing crisis. We will keep working together with Member States to find the best solutions to support companies during these difficult times, in line with EU rules.”

According to the press release, the Commission found that the Cypriot measure is in line with the conditions set out in the State aid Temporary Framework. In particular, the scheme i) relates to new loans with a minimum maturity of three months and a maximum maturity of six years; (ii) foresees a coverage of the guarantee limited to 70% of the loan principal; (iii) provides for minimum remuneration of the guarantee; (iv) contains adequate safeguards to ensure that the aid is channelled effectively by the financial intermediaries to the beneficiaries in need; and (v) ensures that support will be granted no later than 31 December 2021.

“The Commission approved the aid measure under EU State aid rules”, the press release noted.