Reed Smith Client Alerts

Companies of differing sizes and sectors of industry are facing considerable liquidity challenges due to the impact of the COVID-19 outbreak. In response, governments across Europe have introduced packages of measures that are designed to help businesses weather the storm.

This alert provides a high-level summary of the measures introduced by the European Central Bank and certain jurisdiction-specific measures introduced in France, Germany and the United Kingdom (UK).

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European Central Bank (ECB)

The ECB has launched a €750 billion Pandemic Emergency Purchase Programme (PEPP) to support the liquidity and financial positions of businesses in all sectors of the Eurozone. The PEPP is an expansion of the ECB’s various current asset purchase programmes through which the ECB buys corporate bonds of eligible issuers on the secondary market.

These asset purchase programmes comprise:

  • The secondary markets public sector asset purchase programme (Decision (EU) 2020/188)
  • The third covered bond purchase programme (Decision (EU) 2020/187)
  • The asset-backed securities purchase programme (Decision (EU) 2015/5)
  • The corporate sector purchase programme (Decision (EU) 2016/948)

The programmes are scheduled to operate until 31 December 2020. One key restriction in the eligibility criteria for the PEPP scheme is that issuers must be incorporated in a Member State whose currency is the euro (therefore excluding UK-based issuers).

For more information, please view the PEPP criteria.


The French government has launched the State Guarantee Scheme, whereby loans provided by financial institutions to eligible French businesses between 16 March 2020 and 31 December 2020 will be guaranteed by the State. The maximum amount that may be provided is dependent on the type of borrower, but the amount of the loan may reach up to three months of the company's 2019 turnover, or two years of business payroll for innovative companies or companies created since January 2019 (based on estimated business payrolls for two years). No repayment will be required in the first year, and the company may choose to amortize the loan over a maximum period of five years.

In addition, the French government has set up a €4 billion emergency plan to support start-ups. Companies may also benefit from direct lending from the state-owned BPI bank, including unsecured loans for SMEs and medium-sized companies.

For further details on the French State Guarantee Scheme, including details relating to eligibility criteria and restrictions, please view the French State Guarantee Scheme.