Press Release: State aid: Commission approves Latvian state guarantee to JSC Liepājas Metalurgs

The European Commission authorised on 15 december 2009, under EU state aid rules, an €89 million state guarantee that Latvia intends to provide to the steel manufacturer JSC Liepājas Metalurgs (LM) for financing its modernisation. LM is an economically sound company of strategic importance for the Latvian economy. Due to the financial crisis, LM could not raise money necessary for its modernisation without a state guarantee. The decision is based on the Commission’s Temporary Framework for state aid measures giving Member States additional scope to facilitate access to finance in the present economic and financial crisis. The Temporary Framework's wage cap restriction (which limits the maximum amount of loans to be covered by state guarantees) has recently been amended to take into account the situation of low wage countries such as Latvia.