Brussels, 30th April 2009
The European Commission has approved under EC Treaty state aid rules a prolongation of the Finnish support scheme to stabilise financial markets by providing guarantees to eligible financial institutions. The Commission found the measure, initially approved on 13 November 2008 (see IP/08/1705), to be in line with its Guidance Communication on state aid to overcome the financial crisis (see IP/08/1495). In particular, the measure as amended is limited in time and scope. The Commission therefore concluded that the measure is an adequate means to remedy a serious disturbance of the Finnish economy and as such in line with Article 87.3.b of the EC Treaty.
Competition Commissioner Neelie Kroes said: "The prolongation of the guarantee scheme provides Finland with effective means of restoring confidence in the Finnish financial system and boosting interbank lending, while at the same time establishing safeguards to limit distortions of competition".
The scheme, notified on 17 April 2009 to the Commission, aims at further stabilising financial markets by ensuring financial institutions' access to financing. The scheme introduces two main modifications:
First, the temporal scope of the scheme has been extended, i.e. the instruments guaranteed under the scheme may be issued until 31 December 2009. Secondly, the material scope of the scheme has been broadened, so that guarantees can now cover instruments with a maturity of up to five years. Previously, the maximum maturity was three years (except for covered bonds).
All other conditions (such as eligible institutions, remuneration, behavioural conditions) remain as laid down in the original decision (see IP/08/1705).
The Commission concluded that the amendments comply with the conditions laid down in its Guidance Communication on state aid to the financial sector during the crisis (see IP/08/1495). In particular, the Commission found that the prolongation of the guarantee scheme is non-discriminatory, limited in time (until 31 December 2009) and scope, provides for behavioural safeguards to avoid distortions of competition and is subject to a market-oriented remuneration from the beneficiaries.
The non-confidential version of the decision will be made available under the case number N 239/2009 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.