Tuesday, October 6, 2009

EU: The European Commission has approved the French and Dutch short-term export-credit insurance schemes

The European Commission (EC) of the EU has authorised the French measure until 31 December 2010. The French measure is aimed at limiting the adverse impact of the current financial crisis on export firms.

The EC found the measure to be in line with its Temporary Framework for state aid measures to support access to finance in the current financial and economic crisis (see IP/08/1993). According to the Competition Commissioner Neelie Kroes "the French short-term export credit insurance scheme provides the appropriate balance between supporting exporters in areas where the market is temporarily not functioning properly and limiting distortions of competition."

"Ensuring effective export credit insurance is vital for building the basis for a strong economic recovery", she added.

In alia, the premiums charged under the public scheme are aligned on those of the private market, as stipulated by the safeguard clause in the Commission's Communication on short-term export-credit insurance. The premiums are set at a level that provides an incentive for exporters to have recourse to private insurers as soon as sufficient cover will be available on the private market.

Plus: The measure includes safeguards so that financially unsound transactions and counterparties that would not obtain cover even under normal market conditions do not unduly benefit from the measure.

The same rationale explained that approval of the Dutch measure 3 days earlier.

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