It could be called a “soft landing”. A gradual return to normality for one of the measures that, during the most acute phase of the pandemic, had been put in place to help businesses: State-guaranteed loans. The best known was the one up to € 30,000 guaranteed at 100 percent, obtainable without any investigation by the banks, and repayable in 15 years. But in reality, small and medium-sized enterprises have been able to benefit from guaranteed credit lines of up to 5 million euros.
The liquidity injection injected into the system was enormous. During 2020 and in the first six months of 2021, the Guarantee Fund put the stamp on 148 billion euros of loans, equal to 6 per cent of the Italian GDP, of which 133 billion disbursed in “derogation” from the normal rules such as provided for by the emergency rules and as allowed by the European Commission thanks to the temporary suspension of the rules on state aid. But if the liquidity injection was “monstrous”, even the losses that the state is destined to suffer have few precedents.
The estimate is contained in the Technical Report of the budget maneuver just transmitted to Parliament which, among other things, profoundly reforms, as we said, the instrument of loans to businesses guaranteed by the State. “The expected loss on the guaranteed portfolio as of 31 December 2021”, the document reads, is “approximately equal to 22 billion euros”. Behind this number there are restaurants, bars, shops, VAT numbers and small and medium-sized enterprises, which have obtained loans from banks but will not be able to repay them. It will therefore be up to the State to honor the guarantee given to credit institutions. For the public accounts, for now, this is not a problem. 25 billion euros have already been allocated to cover the Guarantee Fund. And the move by the Draghi government adds three more.
But the central point is another. As we emerged, thanks to vaccines, from the health emergency, the time has come for the government to also exit the economic emergency by reducing aid. Without excessive tearing though. Guaranteed loans of up to 30 thousand euros are extended for the whole of next year. However, starting next January 1st, the public “shield” drops to 80 percent. From 1 April the free guarantee is also eliminated. Those who ask the state to protect their credit lines will have to pay a one-off fee. From 1 July 2022, things will change again.
THE DEROGATIONS
From that moment, in fact, the European Commission’s derogation on state aid will expire and, for the moment, it is not yet clear what will happen next. Meanwhile, the maneuver provides that the guarantee, at least for companies that are in class one and two of the rating models applied by the banks, will still drop to 60 percent. And, therefore, the assessment of creditworthiness will also return.
There will also be other news. An annual limit is placed on the commitments that may be borne by the Fund. For 2022, this limit will be 50 billion euros. In addition, a system of continuous monitoring of the risks of enforcing public guarantees will be introduced. Every three months the Fund will have to send to the Ministry of Economy and Economic Development a summary statement with the composition of the portfolio and the risk estimates. The exit from the measure, or “tapering” as the central bankers would say, has begun.
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