Brussels, 15/09/2009 (Agence Europe) - On Tuesday 15 September, the European Commission authorised a scheme envisaged by Germany to limit the adverse impact of the current financial and economic crisis on the supply of export credit. Under the scheme, the German public credit institution Kreditanstalt für Wiederaufbau (KfW) would be allowed to purchase existing export loans from banks. These banks would have to use the cash received for granting new export loans to purchasers outside the European Union. The Commission found the draft measure to be in line with its October 2008 Communication on state support for financial institutions in the current financial crisis and authorised it for six months. The Commission considers that the scheme is appropriate and necessary to address a major market disruption and it contains sufficient safeguards to minimise potential distortions of competition. It is also limited in time, foresees market-orientated pricing and applies only to the financing of exports outside the Single Market. The new loans are also expected to comply with the conditions of the OECD Arrangement on export credits, including maturity limitations.
Due to the financial crisis, banks can currently experience severe difficulties to find long term funding, which can make them very reluctant to grant new export credits (i.e. long term loans to foreign customers to finance the purchase of products sold by a national producer). (C.D./trans/rh)