The European Commission has authorised under state aid rules of the EC Treaty, a scheme offering reduced-interest loans to businesses investing in the production of green products. The aid, which is one of the measures adopted by France to tackle the current economic crisis, will support businesses faced with financing problems because of the credit squeeze, while at the same time making it easier for them to invest in products with an environmental benefit.

The scheme is based on the provisions of the temporary framework on aid for the production of green products. In particular, the investment must relate to products that will meet or surpass future Community environmental protection standards.

It will allow state, regional or local authorities to grant until December 31st 2010 reduced-interest loans with a maximum term of two years. It meets the conditions imposed by the Commission’s temporary state aid framework that gives Member States additional possibilities for providing businesses with improved access to financing during the economic and financial crisis, and is therefore compatible with Article 87.3 b) of the EC Treaty, which permits aid intended to remedy a serious disturbance in the economy of a Member State.

The reduction in the interest rate may not exceed 50% for small and medium-sized enterprises (SMEs) and 25% for large businesses, in relation to the reference rate, and must take into account the enterprise's risk profile when the loan is granted. The aid scheme applies only to businesses that were not in difficulty on July 1st 2008 or that were not in difficulty on that date but have since fallen into difficulty because of the economic crisis.

Lastly, the monitoring reports to be produced by the French authorities must include additional information, in particular the sectors of activity covered and the environmental benefits of the measure.

Competition Commissioner Neelie Kroes said that the measure would ease the credit constraints on businesses affected by the current economic situation, provided that they invested in products that were more environmentally friendly. This would encourage the businesses concerned to prepare for the challenges of the future by enabling them to emerge from the crisis with a business model more consistent with EU environmental objectives. Good cooperation with the French authorities had allowed the Commission to take the decision with the speed warranted by the situation.

French measures to tackle economic crisis

This scheme is the second measure authorised for France under the new temporary framework for state aid, after the scheme for aid of up to 0.5 M€. France is the first country to avail itself of the provisions on aid for production of green products under the temporary framework.

The decision will be made available under case number N 11/2009 in the State Aid Register on the DG Competition website once all the confidentiality issues have been resolved.