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State aid: Commission opens in-depth investigations into support for short‑term export-credit companies Ducroire and SACE BT

European Commission - IP/11/213   23/02/2011

Other available languages: FR DE NL IT

IP/11/213

Brussels, 23 February 2011

State aid: Commission opens in-depth investigations into support for short‑term export-credit companies Ducroire and SACE BT

The European Commission has opened in-depth investigations to examine whether capital injections granted to Ducroire of Belgium, on the one hand, and SACE BT of Italy, on the other hand, by their respective State-owned parent entities, were in line with EU state aid rules. The Commission will assess, in particular, whether the parents, Belgium's ONDD and SACE, acted as normal market economy investors and provided the capital on market terms. Ducroire and SACE BT provide short-term export-credit insurance. The opening of an in-depth investigation allows interested third parties to comment on the measures under assessment. It does not prejudge the outcome of the procedure.

Short-term export credit insurance is a market in which private and state-controlled operators compete alongside each other. It is, therefore, important that a healthy competition, beneficial for the European export industry as a whole, is not distorted by State subsidies," said Joaquín Almunia Commission Vice-President in charge of competition policy, adding: "We need to ascertain that Ducroire and SACE BT have not received an unfair economic advantage over their competitors."

The European Commission has opened an in-depth investigation to examine capital injections granted to Ducroire (Belgium) and SACE BT (Italy) upon their establishment in 2004, by their parent State-owned entities ONDD and SACE of respectively € 150 million and € 105.8 million.

Both companies provide insurance of short-term export-credit risks to businesses in Belgium and Italy. The insurance of short-term export-credit has developed into a competitive market since the late 90s, when the Commission adopted a Communication aimed at removing distortions of competition brought about by the granting of State support to the sector (see IP/97/538). This does not prevent Member States from granting aid, for example, in the form of guarantees when insurance cover for export credit risks becomes temporarily unavailable on the market, as was the case during the financial crisis (see IP/10/1636 on extension of crisis-related state aid measures).

In addition to the two initial capital injections, the Commission will investigate, in the Italian case, the reinsurance cover provided by SACE in favour of SACE BT and the further capital injected to cover SACE BT's losses in 2009.

As to the Belgian case, it will examine in more detail the State guarantee covering ONDD's activities and possible internal transfers of resources within ONDD in favour of activities which were subsequently transferred to Ducroire.

None of the measures above were notified to the Commission by the two Member States concerned. The Commission has received a complaint from a competitor.

Under EU state aid rules, interventions by State entities in companies carrying out economic activities can be considered to be free of aid if they are made on terms that a private agent operating under market conditions would have accepted (the so-called "market economy investor principle"). On this basis, the Commission will examine whether ONDD and SACE acted like market economy operators when deciding to allocate capital and, in the case of SACE, to provide the reinsurance cover to its subsidiary. If not, the measures will be considered to contain state aid and the Commission will verify whether such aid is compatible with EU state aid rules.

The non-confidential version of the decisions will be made available under the case numbers SA.23420 (NN40/2010) and SA.23425 (NN41/2010) 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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