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Brussels, 15 th September 2009

State aid: Commission approves German export credit scheme

The European Commission has authorised, under EC Treaty state aid rules, a scheme envisaged by Germany to limit the adverse impact of the current financial and economic crisis on the supply of export credit. Under the scheme, the German public credit institution Kreditanstalt für Wiederaufbau (KfW) would be allowed to purchase existing export loans from banks. These banks would have to use the cash received for granting new export loans to purchasers outside the European Union. The Commission found the draft measure to be in line with its October 2008 Communication on state support for financial institutions in the current financial crisis (see IP/08/1495 ) and authorised it for six months. In particular, the scheme is appropriate and necessary to address a major market disruption and it contains sufficient safeguards to minimise potential distortions of competition. It is also limited in time, foresees market-orientated pricing and applies only to the financing of exports outside the Single Market.

Competition Commissioner Neelie Kroes said: “I am satisfied that this German measure would contribute to limit the adverse impact of the current financial and economic crisis on the availability of export credit without giving rise to disproportionate distortions of competition."

Due to the financial crisis, banks can currently experience severe difficulties to find long term funding, which can make them very reluctant to grant new export credits (i.e. long term loans to foreign customers to finance the purchase of products sold by a national producer).

In this context, Germany proposes to introduce a scheme to facilitate the refinancing of existing export credits, thereby providing banks with appropriate funding to grant new export credits. KfW will buy from export financing banks existing loans covered by a 100% export credit insurance of the Federal Government. The banks that sold such loans to KfW and received liquidity in exchange, would have to provide new export loans to customers outside the EU of the same value as the financing received from KfW.

The new loans would have to comply with the conditions of the OECD Arrangement on export credits, including maturity limitations.

The non-confidential version of the decision will be made available under the case number N 456/2009 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News .

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