IP/09/706

Brussels, 6^th May 2009

State aid: Commission approves Danish export credit insurance scheme

The European Commission has authorised, under EC Treaty state aid rules, a measure adopted by Denmark to limit the adverse impact of the current financial crisis on export 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 Danish measure enables Denmark to support export firms in continuing to create value and at the same time avoids the crowding-out of private companies from the credit insurance market".

Under the notified scheme, the Danish state export-credit agency Eksport Kredit Fonden (EKF) would provide export-credit reinsurance to complement insurance cover available on the private market. Under the reinsurance agreement with the private credit insurers, EKF would take over the part of the risk related to those transactions for which private insurers have withdrawn their cover. Both, the private insurers and the exporters would retain part of the underlying risk.

The Commission concluded that the measure complies with the conditions laid down in its Temporary Framework on state aid to the real economy during the crisis (see IP/08/1993). In particular, the measure meets the following criteria:

• The necessary cover has become unavailable on the private insurance market as a consequence of the financial crisis.
• The premiums required by EKF are aligned on those of the private market, as stipulated by the safeguard clause 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 even under normal market conditions, unduly benefit from the measure.

The non-confidential version of the decision will be made available under the case number N 198/2009 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.