Brussels, 25/06/2010 (Agence Europe) - On Friday 25 June, the European Commission decided to extend an aid scheme for credit institutions in Austria and a Latvian bank guarantee scheme until the end of 2010. The extended schemes feature higher premiums to be paid by banks to the state for guaranteeing the loans they raise on the market. This is to encourage banks to finance themselves without state support and to limit as far as possible distortions of competition. To be extended, the fees charged by government need to be increased and the banks that continue to rely heavily on such guarantees for their financing should undergo a viability review. The extensions are for six months, until the end of 2010. The Austrian aid scheme, initially approved on 9 December 2008, is due to expire at end of this month. It covers guarantees on interbank lending, asset guarantees and capital injections, but only the guarantee scheme has been changed. The extended scheme has been deemed to be well targeted and proportionate. The Latvian scheme was initially approved on 22 December 2008 to run until 30 June 2010. As in the case of the Austrian scheme, the extended measures are considered well targeted, proportionate and limited in time and scope. The extension of these two schemes follows on from those already authorised for Germany and Hungary on 23 June (see EUROPE 10166) and Sweden on 15 June. (F.G./transl.rt)