Brussels, 16/03/2010 (Agence Europe) - On Tuesday 16 March, the European Commission authorised a short-term export insurance scheme adopted by Slovenia to limit the adverse impact of the current financial crisis on export firms. In a press release, Competition Commissioner Joaquín Almunia said that “the export credit insurance scheme provides Slovenia with the means to support companies in areas where the market is currently not functioning properly, while at the same time establishing safeguards to limit distortions of competition”. The Commission authorised the measure until 31 December 2010.
Under the notified scheme, Slovenia intends to provide through the State-owned agency SID Banka short-term export-credit reinsurance to complement the insurance cover available on the private market. SID Banka will conclude reinsurance agreements with private credit insurers under which it will take over the part of the risk related to transactions for which private insurers have withdrawn their cover. Both the private insurers and the exporters will 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. In particular, the measure meets the following criteria: Slovenia has demonstrated that the necessary cover has become insufficient or unavailable on the private insurance market as a consequence of the financial crisis; the premiums required in the Slovenian scheme are above those charged in the private export credit insurance market and are thus in line with the Commission's Communication on short-term export-credit insurance. As a result, exporters have an incentive to have recourse to private insurers once there is again sufficient cover on the private market. Moreover, the measure includes safeguards ensuring that financially unsound transactions and counterparties that would not obtain cover even under normal market conditions, do not unduly benefit from the measure. (O.L./transl.rt)