EU Commission approved aid scheme for SMEs in Wallonia

On 28 July 2017, the European Commission approved a 20 million of euro Belgian aid scheme that is aimed primarily at facilitating the rescue and restructuring of small and medium size companies (SMEs)in the region of Wallonia.

Rescue and restructuring aid are among the most distortive types of State aid because they may significantly slow economic growth in the sectors concerned. In general, restructuring of companies should usually be possible without State aid, through agreements with creditors or by means of insolvency or reorganisation proceedings. It follows that undertakings should only be eligible for State aid when they have exhausted all market options and where such aid is necessary in order to achieve a well-defined objective of common interest.

The Commission assessed the Belgian scheme under the Commission's 2014 Guidelines on the rescue and restructuring of non-financial companies in difficulty reaching the conclusion that the regime adopted by Belgium with regard to the Wallonia region is in line with the EU State aid rules. The Commission found that the aid scheme is transparent and limited in time and in scope, and that it will contribute to economic cohesion and development in the region, without unduly distorting competition in the Single Market.

The publicy-owned “Société Wallonne de Gestion et de Participation” (SOGEPA) will therefore provide rescue and restructuring support to Walloon SMEs in financial difficulty, whose default would likely to provoke social hardship in the region. SMEs impacted by the recent closure of Caterpillar's Belgian plant in Gosselies are an example, as they may be eligible for the aid scheme.