The European Commission has approved a €1.26 billion (HRK 9.5 billion) Croatian wage subsidy scheme to support employers and self-employed persons affected by the coronavirus pandemic, the European Commission reported on Friday.

The scheme was approved under the State aid COVID Temporary Framework.

Under this job preservation aid scheme, the aid takes the form of wage subsidies.

The measure is open to employers and self-employed persons active in a number of sectors particularly affected by the coronavirus pandemic, such as tourism and passenger transport.

The purpose of the measure is to reduce the wage costs of the eligible employers during the period between June 2020 and June 2022; and to support low earning self-employed individuals whose income had been negatively affected by the coronavirus pandemic.

The scheme therefore aims at preserving the employment levels and at avoiding layoffs.

The Commission found that the Croatian scheme is in line with the conditions set out in the COVID Temporary Framework.

The measure assists businesses particularly affected by the coronavirus pandemic and is aimed at avoiding layoffs.

The monthly wage subsidies do not exceed 80% of the monthly gross salary of the benefitting personnel and the aid has been granted before 30 June 2022. The Commission concluded that the measure is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State.