Brussels, 09/02/2010 (Agence Europe) - On Tuesday 9 February, the European Commission authorised a Danish scheme providing export loans to Danish exporters and /or their clients who experience difficulties in accessing funding in the current financial crisis. The Commission found the scheme to be in line with its Communication on Reference Rates of 12 December 2007, in particular because it provides funding on market terms and therefore does not constitute state aid as defined in the provisions in the Treaty on the Functioning of the European Union (TFEU).
Competition Commissioner Neelie Kroes said: “The Danish scheme will contribute to limit the adverse impact of the withdrawal of several banks from the export credit market. At the same time, the interest rate charged by the state is sufficient to ensure that the scheme is not used to offer artificially cheap financing to Danish exporters and their customers". Due to the financial crisis, several banks exited the export credit business and the banks still active on that market reduced their activities. Since they experienced difficulties finding long term funding, the banks are reluctant to grant new long-term export credits.
If the tightened liquidity position of banks restricts them from financing a long-term export loan requested by a Danish exporter and/or its client, they can enter into an agreement with the Danish state-owned export finance agency (EKF) for a later assignment of the loan to the scheme. Banks then play a mere role of intermediary and administrator of the loan. The pricing (i.e. interest rate) of the loans is calculated by EKF, which has extended experience in assessing the creditworthiness of borrowers and the value of the collateral they intend to provide. EKF always carefully benchmarks the interest rate on the loan to market prices and to the Commission's Reference Rate Communication. The Commission therefore concluded that the scheme does not contain state aid. (O.L./transl.fl)