The European Commission has authorised, under EU state aid rules, a measure adopted by Slovenia to limit the adverse impact of the current financial crisis on export firms. In particular, the measure requires a higher remuneration than that offered by the private market and tackles the problem of the current insufficiency of short-term export credit insurance cover on the private market.
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 would conclude reinsurance agreements with private credit insurers under which it would take over the part of the risk related to transactions for which private insurers had withdrawn their cover. Both the private insurers and the exporters would retain part of the underlying risk.
The Commission 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 and authorised the measure until 31 December 2010. Competition Commissioner Joaquín Almunia said: “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.” These safeguards ensure that financially unsound transactions and counterparties that would not obtain cover even under normal market conditions, do not unduly benefit from the measure.
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.
The non-confidential version of the decision will be made available under the case number N 713/2009 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved.
