POLITICS & INSTITUTIONS - ECONOMY

State-guaranteed loans extended until end 2021



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Businesses impacted by the pandemic can continue to benefit from state-guaranteed loans until the end of 2021.

The scheme, which was first announced on 25 March 2020 and was due to expire on 30 June, has been extended until 30 December 2021, finance minister Pierre Gramegna (DP) announced on Wednesday.

The state guarantees up to €2.5bn over a maximum period of six years for bank loans to companies, as part of the government's package of measures to support the economy in the face of the pandemic.

From the launch of the scheme up to 28 June 2021, the state treasury, which is in charge of managing the guaranteed loans, recorded loans of €186m. The Luxembourg state guarantees 85%, i.e. €158.6m.

The support has mostly benefited the trade sector, to which loans of €60.8m were granted. The second sector to benefit was construction (€23.7m) and the hospitality industry (€21m). Banks have also granted loans without state guarantees of over €309m to support businesses.

The state has not yet had to intervene as guarantor on any outstanding loan, the finance ministry said.

“The state-guaranteed covid-19 loans will have provided the necessary liquidity to prepare for the end of the crisis,” Gramegna said. “Its extension until the end of the year will allow us to continue to mobilise the investments needed to further accelerate the recovery and build the future. I would like to thank the ABBL and the banks who took their responsibility and showed solidarity in making this scheme possible.”