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British loan guarantee scheme wins EU approval
24 Mar 2009Britain's plan to offer banks £10 billion ($14.7 billion) of loan guarantees to encourage them to start lending again won approval from the European Commission today.
The UK's working capital guarantee scheme will offer a guarantee of up to 50% for portfolios of working capital loans to sound, creditworthy companies with an annual turnover of up to £500 million.
The European Commission said in a statement that the plan was approved as it fulfilled the criteria of being proportionate and necessary to remedy a serious disturbance in the UK economy.
"I appreciate the design of the scheme to make it self-financing and thus to reduce any potential aid to the minimum and limit distortions of competition," EU Competition Commissioner Neelie Kroes said in the statement.
"I also welcome the non-discriminatory character of the scheme as regards the sector and nationality of the borrower," she added.
