Background information

Decree law no. 18 of 17 March 2020 enhances the role of the Guarantee Fund for small and medium enterprises (Fondo di garanzia per le piccole e medie imprese) in supporting businesses affected by the COVID-19 pandemic (art. 49). The eligible companies are the ones classified as small and medium enterprises according to EU legislation, provided that they do not have, at the date of publication of the decree law, non-performing exposures. The same decree law (art. 56) foresees the possibility for micro, small and medium-sized enterprises that have debt exposures vis-à-vis banks and financial intermediaries to suspend loan instalments until 30 September 2020.

Decree law no. 34 of 19 May 2020 (the so called Relaunch Decree) allocated further €55 billion to support businesses, artisans, traders, professionals, workers and families. The main measures are: grants to companies and sole proprietorships with revenues of up to €5 million; the cancellation of the Irap tax (regional production tax) for June and July for all companies with annual sales of up to €250 million; the strengthening of the Guarantee Fund for small and medium enterprises; and financial incentives to favour the strengthening of the financial assets of companies with revenues between €5 and €50 million.

Content of measure

Guarantee Fund for small and medium enterprises (Fondo di Garanzia per le piccole e medie imprese): several decree laws aimed to strengthen the intervention capacity of the Guarantee Fund for small and medium enterprises by introducing temporary exceptions from its current operating rules. In particular, article 49 of the Decree Law 18/2020 of 17 March 2020 provides that for a period of 9 months from its entry into force:

• the guarantee is granted free of charge;
• the maximum guaranteed amount per individual company is increased to €5 million;
• the coverage of the guarantee is 80% (90% in case of reinsurance) on all operations of financing with a maximum guaranteed amount of up to €1.5 million.

Article 56 of decree law No. 18/2020 of 17 March 2020 foresees the possibility for micro, small and medium-sized enterprises that have debt exposures vis-à-vis banks and financial intermediaries to suspend loan instalments until 30 September 2020. Furthermore, all subsidised loans can be suspended.

Decree law no. 34 of 19 May 2020 (the so called Relaunch Decree) introduced a non-refundable contribution to companies with revenues not exceeding €5 million. These companies can access the contribution, provided that the turnover for April 2020 is less than 2/3 of the turnover for April 2019.

Capital strengthening of medium-sized enterprises (Rafforzamento patrimoniale delle imprese di medie dimensioni): article 26 of Decree law no. 34 of 19 May 2020 introduced a tax incentive to encourage the strenthening of the financial assets of medium-sized companies. The tax incentive corresponds to 20% of investment up a maximum investment of €2 million.  Eligible are the companies which:

• have an amount of 2019 revenues between €10 million and €50 million
• due to the COVID-19 emergency, in March and April 2020 suffered an overall reduction in revenues, compared to the same period of 2019, of not less than 33%
• have deliberated a capital increase of not less than €250,000 after 20 May 2020 and by 31 December 2020

Use of measure

The Ministry of Economic Development reports that between 17 March 2020 and 14 June 2020, 618,772 requests were presented to the Guarantee Fund for small and medium enterprises, for a total of requested financing amounting to more than €31 billion.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government	National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Unknown	Unknown
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: Unknown

Involvement

Unknown

Views and reactions

The social partners assessed the measures introduced by the government very differently. The employer association Confindustria pointed at the excessive fragmentation of the measure and the fact that it is too focused on social assistance rather than productive investments. On the contrary, trade unions were skeptical of non-selective and unconditional measures for companies, which do not foresee a direction on the type of investments and their effects on workers.

Sources

• 17 March 2020: Misure di potenziamento del Servizio sanitario nazionale e di sostegno economico per famiglie, lavoratori e imprese connesse all'emergenza epidemiologica da COVID-19. (www.lavoro.gov.it)
• 19 May 2020: Misure urgenti in materia di salute, sostegno al lavoro e all'economia, nonché di politiche sociali connesse all'emergenza epidemiologica da COVID-19. (www.lavoro.gov.it)