The proposal for an Enterprise Stabilisation Fund was revealed in an emergency budget last week, but concerns were raised that it might contravene state aid rules (EurActiv 08/04/09).
The Irish authorities may grant aid of up to €500,000 per firm in 2009 and 2010 to businesses facing problems as a result of the credit crunch. The aid will take the form of direct grants, reimbursable grants, interest rate subsidies and subsidised public loans.
Given its limited timeframe and scope, the scheme has been approved under the European Commission's temporary framework, giving member states additional leeway to facilitate access to financing in the present economic and financial crisis.
"The Irish scheme will help businesses affected by the current credit crunch without unduly distorting competition," Competition Commissioner Neelie Kroes said.
The scheme applies only to businesses which were not in difficulty on 1 July 2008, and whose problems can be attributed to the global liquidity crisis.
Announcing the fund last week, Irish Finance Minister Brian Lenihan said the fund would be worth a total of €100 million over two years and would provide direct financial support to "internationally trading enterprises".
However, it met with a mixed response in Ireland. Dr Aidan O'Boyle, chairman of the Small Firms Association (SFA), described the new Enterprise Stabilisation Fund as "paltry", adding that SMEs had been calling for a package of support measures worth €1 billion.
