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The European Commission has approved under EU State aid rules a German guarantee scheme to support the trade credit insurance market in the face of the coronavirus outbreak.Executive Vice-President Margrethe Vestager in charge of competition policy said The German guarantee scheme will help ensure that trade credit insurance continues to be available to all companies. The measure will support the liquidity of European companies and help them continue their commercial activities in these difficult times. We continue working closely with Member States to ensure that national support measures can be put in place in a coordinated and effective way in line with EU rules.The German support measureGermany notified to the Commission a State guarantee scheme supporting the insurance of trade between companies affected by the coronavirus outbreak.Trade credit insurance protects companies supplying goods and services against the risk of non-payment by their clients. Given the economic impact of the coronavirus outbreak the risk of insurers not being willing to maintain their insurance coverage has become higher. The German scheme ensures that trade credit insurance continues to be available to all companies avoiding the need for buyers of goods or services to pay in advance therefore reducing their immediate liquidity needs. The Commission assessed the measure under EU State aid rules and in particular Article 1073b of the Treaty on the Functioning of the European Union TFEU which enables the Commission to approve State aid measures implemented by Member States to remedy a serious disturbance in their economy.The Commission found that the scheme notified by Germany is compatible with the principles set out in the EU Treaty and is well targeted to remedy a serious disturbance of the German economy. In particular i the trade credit insurers have committed to Germany to maintain their current level of protection in spite of the economic difficulties faced by companies due to the coronavirus outbreak ii the guarantee is limited to only cover trade credit originated until the end of this year iii the scheme is open to all credit insurers in Germany covering also trade credit to purchasers of goods and services in third countries iv the guarantee mechanism ensures risk sharing between the insurers and the State up to a volume of 5 billion and provides an additional safety-net to cover up to 30 billion in total if required and v the guarantee fee provides a sufficient remuneration for the German State.The Commission therefore concluded that the measure will contribute to managing the economic impact of the coronavirus in Germany and beyond.It is necessary appropriate and proportionate to remedy a serious disturbance in the economy of a Member State in line with Article 1073b TFEU and the general principles set out in the Temporary Framework adopted by the Commission on 19 March 2020 as amended on 3 April 2020On this basis the Commission has approved the measure under EU State aid rules.
