The European Commission recently authorised an Irish scheme, which aims to assist businesses to deal with the current economic crisis by providing access to finance. Under the scheme, the Government may grant aid of up to a total of €500,000 per firm until the end of 2010 to businesses facing a shortage of funding due to the credit crunch.

As was mentioned in our March Legal News, the Commission introduced a temporary framework in December 2008 allowing Member States to grant certain types of aid in order to facilitate access to finance during the economic crisis. Businesses who were not in difficulty on 1 July 2008 and who face a shortage or the unavailability of credit due to the crisis may avail of State aid.

The Irish scheme, notified to the Commission on 26 March 2009, complies with the Commission’s temporary framework and any aid granted under the scheme will not require individual clearance. The aid will take the form of direct grants, reimbursable grants, interest rate subsidies and subsidised public loans. The scheme is to be administered by Enterprise Ireland to companies that can satisfy its criteria for eligibility. Approvals will primarily be based on business plans submitted to Enterprise Ireland by the applicant companies.

A number of other Member States have notified schemes to the Commission, including France, Germany, the UK, Austria and Luxembourg to name a few. The scheme expires on 31 December 2010, when financial markets are expected to re-stabilise.