The European Commission has authorised, under EU state aid rules, the first prolongation of a Cyprus guarantee scheme for credit institutions until 30 June, 2013.
The purpose of the scheme is to facilitate credit institutions' access to funding. The original scheme was approved on 6 November 2012 (see IP/12/1171). The Commission found the prolongation of the measure to be in line with its guidance on support measures for banks during the financial crisis. In particular, the prolonged measure is targeted, proportionate and limited in time and scope. The Commission has, therefore, concluded that the guarantee scheme represents an appropriate means of remedying a serious disturbance in the Cyprus economy and as a such, is compatible with Article 107(3)(b) of the Treaty on the Functioning of the EU (TFEU).
During the application of the extraordinary crisis rules for state aid to banks, the Commission has been authorising guarantee schemes on banks’ liabilities for periods of six months in order to be able to monitor developments and adjust conditions accordingly.
Midday Express, 22.1.13
© European Commission
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