Belgium, (Brussels Morning Newspaper) The European Commission has approved Lithuania’s aid scheme worth 130 million euro for supporting companies affected by China’s trade restrictions.
Lithuania proposed the scheme to help its companies hit by China’s discriminatory restrictions imposed without informing EU or Lithuanian authorities, the EC stressed in a statement on Tuesday.
The body reminded that China imposed the restrictions at the end of 2021 and reminded that it raised the issue repeatedly with Chinese authorities.
The approved scheme “will run until 31 December 2027 or until the restrictions imposed by China are lifted, whichever happens first,” the Commission noted and added “companies that are affected by the exceptional circumstances resulting from China’s discriminatory trade restrictions on Lithuania will be able to receive loans up to 5 million euro,” under the scheme.
The aid will be available to all companies except those from the sectors of agriculture and forestry, finance and fisheries and aquaculture.
“This support will allow the affected companies to adapt their business activities to the new market situation, re-orient their business strategies and improve their liquidity to be able to gradually obtain financing in the market from private financial institutions,” the EC pointed out.
It added that loans are to be used only for “sourcing of inputs from different sources, looking for entering into new business markets or using the time to undertake such efforts,” adding that “the loans will need to be repaid within 24 months.”
The Commission reminded that EU rules allow member states to support some economic activities if certain conditions are met.
It noted that the Lithuanian scheme is appropriate, proportionate and necessary to support the companies hit by China’s move and help them to reorient.
The body added that it brought the case against China before the World Trade Organization, stressing that Beijing’s move jeopardises the EU single market.
The Commission pointed out that Lithuania’s scheme “will not have undue negative effects on competition and trade in the EU” and stressed that the move is in line with the bloc’s state aid rules.
The body noted that the situation is exceptional as Chinese authorities de facto blocked exports and imports from and to Lithuania, or connected to Lithuania.
