European Commission approves € 625 million Italian program for operators and agencies affected by COVID-19

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Operators and travel agencies in Italy affected by the coronavirus epidemic will receive financial support to emerge from the current economic crisis, as the Commission of the European Union has approved an Italian scheme of 625 million euros, in the framework of the temporary state aid framework.

In this regard, Executive Vice President Margrethe Vestager pointed out that the tourism sector in Italy has been hit hard by the economic consequences of the coronavirus, reports SchengenVisaInfo.com.

“This Italian measure of 625 million euros will help companies active in the tourism sector to cope with the liquidity problems they face. We will continue to work with Member States to ensure that national support measures can be put in place in a coordinated and effective manner, in line with EU rules ”, Vestager pointed out.

The temporary state aid framework consists of grants equal to a percentage (between 5 and 20 per cent) of the difference between:

  • the amounts of revenue and expenses recorded from February 23, 2020 to July 31, 2020.
  • the amount of revenue and expenses for the corresponding period of 2019.

Such a move aims to help Italy recover from the financial crisis caused by the spread of the coronavirus pandemic.

The European Commission has concluded that the scheme notified by Italy fulfills the conditions set by the temporary framework, namely that the aid will not exceed € 800,000 per company; and it will be awarded by June 30, 2021.

“The Commission concluded that the Italian measure would help manage the economic impact of the coronavirus in the tourism sector in Italy. It is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in accordance with Article 107 (3) (b) TFEU ‘ a statement from the European Commission reads.

The Temporary Guidance helps European Union member states support the economy amid the COVID-19 outbreak, in line with state aid rules.

The temporary framework provides for several types of aid, which may be granted by the Member States. The framework was modified on April 3, May 8, June 29 and October 13, 2020, and includes the following types of aid:

  • Equity taking, subsidies, advances of more than 100,000 € for a company engaged in the primary agricultural sector, more than 120,000 € for a company involved in the fishing and aquaculture industry and more than € 800,000 for a company engaged in other sectors ”to meet its urgent liquidity needs. “
  • State guarantees for loans taken out by businesses to ensure that banks continue to provide loans to the customer who needs them.
  • Public subsidized loans to businesses with reasonable interest rates for businesses.
  • Short-term public export credit insurance for all international countries, without the need for the Member State in question to demonstrate that the country concerned is “”not marketable”.

Thanks to this framework, Member States are able to combine all support measures, “except loans and guarantees for the same loann ”and exceed the thresholds provided for by the Temporary Framework.

In September, the World Travel & Tourism Council (WTTC) pointed out in its report that Italy stands at risk of losing 36.7 billion euros during this year due to the coronavirus disease situation.

According to the WTTC report, the continued decline in the number of tourists and international travelers could lead to a drop in global spending in Italy by 82% during this year. The Italian economy could have a deficit of 700 million euros per week or 100 million euros per day, on average.

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