Brussels, 27 June 2013
State aid: Commission approves Portuguese Guarantee Scheme on EIB lending
The European Commission has approved a new Portuguese scheme providing State guarantees for banks that guarantee European Investment Bank (EIB) loans granted to companies in Portugal. President Barroso said: "With this decision the European Commission and the EIB reinforce their contribution to the financing of the economy, which is essential for growth and job creation in Portugal".
The scheme will allow participating banks to continue acting as guarantors for both existing and new EIB loans without compromising their liquidity position. Since the scheme ensures that participating banks do not derive any undue advantage from the State guarantee, it is in line with EU state aid rules.
At present, the EIB grants loans to companies in Portugal, either directly, with banks guaranteeing these loans, or through intermediary banks which transfer the EIB funds to the borrowing companies.
However, as result of the Portuguese sovereign crisis, banks' rating fell below EIB credit risk criteria. Consequently, the EIB asked for either (a) the guarantor to be replaced, or (b) the underlying loan/exposure to be fully collateralised, or (c) the loan to be repaid. Moreover, credit rating downgrades had affected Portuguese banks across the board, rendering most, if not all, Portuguese banks ineligible for EIB purposes.
As all of the proposed solutions had considerable drawbacks, the Portuguese authorities notified the scheme under which the Portuguese State would guarantee up to €2 800 million of existing and new guarantees issued by Portuguese banks on an EIB loan portfolio of up to €6 000 million.
The scheme will allow the continuation of the funding provided by the EIB to the real economy and prevent the disruption of the credit granted by the EIB through all banks participating in the scheme.
The non-confidential version of the decision will be made available under the case number SA.36180 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.