State aid: Commission approves Swedish export-credit insurance scheme
The European Commission has authorised, under EC Treaty state aid rules, a measure adopted by Sweden to limit the adverse impact of the current financial crisis on exporting firms. The Commission found the measure to be in line with its Temporary Framework for state aid measures to support access to finance in the current financial and economic crisis (see IP/08/1993 ). In particular, the measure requires market-oriented remuneration and concerns insurance cover currently unavailable on the private market. The Commission authorised the measure until 31 December 2010.
Competition Commissioner Neelie Kroes said: "The Swedish scheme provides exporting firms with the insurance cover they need and, at the same time, contains adequate safeguards to avoid the crowding-out of private companies from the credit insurance market".
Under the notified scheme, the Swedish state agency EKN would provide short-term export-credit insurance coverage to companies established in Sweden which have been unable to get cover on the private market. Only financially sound transactions would be eligible for support under the scheme. EKN´s share of risk would depend on the buyer's creditworthiness and on the level of political risk relating to the buyer's location. The maximum coverage would be 90% for both commercial and political risk, which means that the exporters would have to assume at least 10% of the underlying risk themselves.
The Commission concluded that the measure complies with the conditions laid down in the Temporary Framework for state aid to business during the crisis (see ). In particular, the measure meets the following criteria:
sufficient proof has been provided that the necessary cover has become unavailable on the private insurance market as a consequence of the financial crisis;
the premiums required by EKN are aligned on those of the private market, as stipulated in the Commission's Communication on short-term export-credit insurance. The premiums are set at a level that provides an incentive for exporters to have recourse to private insurers as soon as sufficient cover will be available on the private market.
Moreover, the measure includes safeguards to avoid that financially unsound transactions, and counterparties that would not obtain cover under normal market conditions, unduly benefit from the measure.
The non-confidential version of the decision will be made available under the case number N605/2009 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 .