European Commission approves Malta's €215 million wage subsidy scheme

The European Commission has approved a €215 million Maltese wage subsidies scheme to support companies operating in the sectors affected by the coronavirus outbreak.

The scheme was approved under the State aid Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April 2020.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The €215 million Maltese scheme will help employers maintain jobs in these difficult times. Preserving employment and skills is of utmost importance for the European economy to be able to recover effectively once the health crisis recedes. We are working closely with Member States to ensure that this is done in line with the EU rules”.

The Maltese support measures

Malta notified to the Commission under the Temporary Framework a scheme to finance the wage costs of employers that, due to the coronavirus outbreak, would otherwise have laid off employees. The scheme will be accessible to companies of all sizes and also self-employed individuals operating in sectors that are strongly affected by the current health crisis and the containment measures adopted by national authorities.

The aim of the scheme is to preserve employment and avoid lay-offs of employees at a time when many business activities are either suspended or significantly reduced.

The Commission found that the Maltese scheme is in line with the conditions set out in the Temporary Framework. In particular, (i) the measure will finance part of the wage costs for employees that would otherwise have been laid off, (ii) the aid is proportional as it is capped at €800 per full time employee per month, and (iii) the scheme respects the maximum duration of 12 months.

The Commission concluded that the Maltese measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU.

On this basis, the Commission approved the measure under EU State aid rules.

Minister for the Economy, Investment and Small Businesses Silvio Schembri welcomed the decision, saying that the European Commission’s own approval of the way the Maltese government is dealing with the disruption the COVID-19 pandemic brought about is a certificate for the economic decisions taken, which resulted in a surplus and a significant increase in revenue rendering it in a good position to help businesses and the self-employed to face this "unprecedented economic storm."

‘Having the lowest debt rate amongst European member states and registering the highest economic growth in the past years puts Malta at an advantage when compared to the rest of its European peers, which enables our country to restart its economic activity from a strong position’, Schembri said.