The European Commission has approved, under EU State aid rules, an amendment to an existing Italian guarantee scheme, including an up to €3 billion budget increase, for the reinsurance of natural gas and electricity trade credit risk in the context of Russia's war against Ukraine. The amendment was approved based on Article 107(3)(b) of the Treaty on the Functioning of the European Union ('TFEU'), recognising that the EU economy is experiencing a serious disturbance.
The Italian measure
Italy notified to the Commission an amendment to an existing Italian guarantee scheme for the reinsurance of natural gas and electricity trade credit risk in the context of Russia's war against Ukraine.
The original scheme, approved by the Commission on 30 September 2022 (SA.103757), aims at limiting the risks insurers are currently facing by offering trade credit insurance to customers. Under the administration of SACE, the Italian Export Credit Agency, the scheme ensures that trade credit insurance continues to be available to companies, avoiding the need for them to pay their energy bills in advance or within a few weeks, thus reducing their immediate liquidity needs.
Italy notified the following modifications to the existing scheme: (i) an overall budget increase by up to €3 billion; (ii) an extension of the period in relation to which aid may be granted, until 31 December 2023; (iii) a longer deferral (i.e. 36 months) for the payment of energy bills by customers; and (iv) the introduction of the possibility to open the scheme also to companies with annual maximum turnover above €50 million.
The Commission assessed the amended scheme under EU State aid rules, and in particular Article 107(3)(b) of the Treaty on the Functioning of the European Union (TFEU), recognising that the EU economy is experiencing a serious disturbance.
The Commission found that the amendment notified by Italy, is compatible with the principles set out in the EU Treaty and is well targeted to remedy a serious disturbance to the Italian economy. In particular, (i) the trade credit insurers have committed to maintain the same level of protection offered on 22 March 2022 and to lower the premiums that customers have to pay for transactions covered by the measure, compared to a situation without the latter; (ii) the guarantee is limited to trade credit originated until the end of this year; (iii) the scheme is open to all credit insurers in Italy; and (iv) the guarantee mechanism ensures risk sharing between the insurers and the State, up to a volume of €5 billion.
The Commission concluded that the scheme, as amended, will contribute to managing the economic impact of the current crisis in Italy. 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 State aid Temporary Crisis Framework, which the Commission has applied by analogy.
On this basis, the Commission approved the amendment under EU State aid rules.
Background
The State aid Temporary Crisis Framework, adopted on 23 March 2022, enables Member States to use the flexibility foreseen under State aid rules to support the economy in the context of Russia's war against Ukraine.
The Temporary Crisis Framework has been amended on 20 July 2022, to complement the Winter Preparedness Package and in line with the REPowerEU Plan objectives.
The Temporary Crisis Framework has been further amended on 28 October 2022 in line with the recent Regulation on an emergency intervention to address high energy prices ('Regulation (EU) 2022/1854') and the Commission's proposal on a new emergency regulation to address high gas prices in the EU and ensure security of supply this winter.
The Temporary Crisis Framework provides for the following types of aid, which can be granted by Member States:
- Limited amounts of aid, in any form, for companies affected by the current crisis or by the subsequent sanctions and countersanctions up to the increased amount of €250,000 and €300,000 in the agriculture, and fisheries and aquaculture sectors respectively, and up to €2 million in all other sectors;
- Liquidity support in form of State guarantees and subsidised loans. In exceptional cases and subject to strict safeguards, Member States may provide to energy utilities for their trading activities public guarantees exceeding 90% coverage, where they are provided as unfunded financial collateral to central counterparties or clearing members.
