Five EU Member States are seeking regulatory approval to extend state guarantee schemes launched last year to help the crisis-hit financial sector, the European Commission said today.
Governments were forced to step into the bank bond markets in late 2008 after they seized up in the wake of investment bank Lehman Brothers' collapse in September that year. The Commission cleared €2.9 trillion in guarantee schemes up to the end of 2009, of which €916 billion were taken up by banks, on condition that the measures were temporary and that banks pay near market prices for the support.
The EU competition watchdog earlier today approved a one-month extension to Ireland's scheme, which Dublin may look to extend further.
Germany, the Netherlands, Greece, Sweden and Hungary have asked for permission to continue their schemes beyond June 30 when they are due to end, a Commission official said, adding the EU executive was now considering the requests.
Nine other countries including Spain, Austria, Finland, Portugal, Denmark and Poland, also have guarantee schemes running until the end of June.
The Commission said earlier this month that banks would have to pay by up to 40 basis points more for extended schemes in a move designed to wean the sector off state support.
In addition to state guarantees, EU governments also spent trillions of euros to recapitalise the financial sector.
Reuters