State aid: Commission approves €500 million Spanish reinsurance scheme to support trade credit insurance market in coronavirus outbreak

The European Commission has approved, under EU State aid rules, a €500 million Spanish reinsurance scheme to support the trade credit insurance market in the context of the coronavirus outbreak. Trade credit insurance protects companies supplying goods and services against the risk of non-payment by their clients. Given the prolonged economic impact of the coronavirus outbreak, the risk of insurers not being willing to maintain their insurance coverage has become higher. The scheme aims at ensuring that trade credit insurance will continue 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 scheme is designed to supplement private reinsurance. Private insurers have the possibility to choose a coverage of public re-insurance guarantee of up to 60%. Risk and premia are then shared pro-rata between the State and the private insurers. The Commission assessed the measure under 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 Spanish scheme 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 State aid Temporary Framework. Furthermore, the Commission has found the scheme is in line with the Short-term export-credit Communication. On this basis, the Commission has approved the measure under EU State aid 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.58458 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved.