The European Commission has approved, under EU State aid rules, a €10 billion (US$10.97 billion) French guarantee scheme to support the domestic credit insurance market in the context of the coronavirus outbreak.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said, “The €10 billion French guarantee scheme will make sure that domestic trade credit insurance can continue to be issued. This will protect the liquidity needs of French companies and will help them carry on 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 manner, in line with EU rules.”
France notified the Commission a State guarantee scheme supporting the insurance of domestic trade affected by the coronavirus outbreak. The total budget of the measure is estimated at €10 billion.
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 issue this insurance has become higher. The French 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 107(3)(b) 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.
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