THE EU has given the green light to a €100 million State-aid scheme for Irish companies facing difficulties as a result of the recession.
Competition commissioner Neelie Kroes yesterday said that Brussels had approved the enterprise stabilisation fund which Minister for Finance Brian Lenihan announced in last week’s emergency Budget.
Under the scheme, State agency Enterprise Ireland can give up to €500,000 to viable companies that are facing difficulties as a result of the credit squeeze and recession.
Mr Kroes said the commission had authorised the Government to give grants of up to €500,000 over 2009 and 2010 to businesses facing funding problems.
The commission’s statement pointed out that the facility had been put in place because of the credit crunch, and added that the money could be given in the form of direct grants, repayable grants, interest-rate subsidies and public loans.
“The Irish scheme will help businesses affected by the current credit crunch without unduly distorting competition,” Mr Kroes said.
EU law bans state aid to business that can potentially distort normal competition. As a result, the State has to seek Brussels approval for aid schemes.
Mr Lenihan announced the scheme as part of a package of job-creation and protection measures in the emergency Budget.
“The broad cost of each 1,000 people who lose their jobs is now estimated at about €21 million,” the Minister said.
“In order to support employment, the Minister for Enterprise, Trade and Employment will set up an enterprise stabilisation fund worth €100 million over two years. In conjunction with the banking sector this fund will provide direct financial support to eligible internationally-trading enterprises.”
The commission’s statement stressed yesterday that the amount of aid given to individual businesses over the two-year period could not exceed €500,000. The scheme could only apply to companies that were not in trouble before July 1st last year, when it said the crisis began to unfold.
Stabilisation fund: how it works
What is the enterprise stabilisation fund?
An aid programme for viable businesses left vulnerable by the recession and credit crunch.
What businesses qualify?
Any Irish firm that is focused on exporting goods and services. They must have a business plan designed to negotiate the current crisis, and their problems must have arisen after July 1st, 2008.
How much is available and how will it be paid?
Up to a maximum of €500,000 over 2009 and 2010. The money will be mainly paid over in the form of repayable preference shares, owned by Enterprise Ireland, which will administer the scheme.
How do you apply?
As a first step, get in touch with Enterprise Ireland, which has offices around the country and a website.
After meeting the agency, it will let you know if you qualify, and you can go from there.
What if I’m turned down?
Enterprise Agency says it has a range of other supports and services of which businesses can avail. Applying for the stabilisation fund will not rule you out of any of these.
