State aid: Commission approves Danish guarantee scheme to stabilise trade credit insurance market in coronavirus outbreak

The European Commission has approved, under EU State aid rules, a Danish guarantee scheme to support the trade credit insurance market in face of 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 issue this insurance has become higher. The Danish 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. The Commission found that the scheme notified by Denmark is compatible with the principles set out in the EU Treaty and is well targeted to remedy a serious disturbance to the Danish economy. The Commission therefore concluded that the measure will contribute to managing the economic impact of the coronavirus in Denmark. It is necessary, appropriate and proportionate to remedy a serious disturbance in the economy of a Member State, in line with Article 107(3)(b) TFEU and the general principles set out in the Temporary Framework adopted by the Commission on 19 March 2020, as amended on 3 April 2020 and 8 May 2020. On this basis, the Commission approved the measures under EU State aid rules. Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “The Danish guarantee scheme will help ensure that trade credit insurance remains available to all companies to secure their commercial exchanges. This will protect their liquidity needs and help them continue their 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.” More information on the Temporary Framework and other actions taken by the Commission to address the economic impact of the coronavirus pandemic can be found here. The non-confidential version of the decision will be made available under the case number SA.57112 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.