AGA-Report No. 314
The EU Commission extends the exception for state aid until 30 June 2021
Important contribution towards strengthening the exporting industry during the crisis
On 13 October 2020 the EU Commission decided to extend the existing exception for state aid until 30 June 2021. Originally, it had been planned to discontinue it at the end of the year 2020.
Due to this exception it is possible to continue covering short-term export transactions (credit periods of up to 24 months) within the EU and in certain OECD countries under state export credit guarantees.
The extension of this exemption, on which the European Commission decided quite early, was a prime concern of Germany’s EU Council Presidency and an important contribution towards strengthening the exporting industry during the current crisis. In the absence of private insurance facilities for a major part of the “marketable risks” exporters are particularly dependent on state support for this sector in the current situation. Now, this support will continue to be available.
Federal Government makes the KfW Refinancing Programme permanent
Market test no longer required
The Federal Government decided to make the programme for the refinancing of export credits permanent with effect from 1 January 2021. Besides, the terms of the programme will be improved at the same time. The European Commission has already given its consent (see also Press release of the BMWi).
Through this programme, KfW Bankengruppe refinances loans granted by commercial banks to finance German exports that are covered under an export credit guarantee of the Federal Republic of Germany. The export credits must be based on export transactions regarded by Federal Government as eligible for cover under the programme.
The KfW Programme is available to German banks and German branch offices of foreign banks for the refinancing of Hermes-covered buyer credits and Airbus Guarantees at matching maturities. For this purpose, a specific Securitisation Guarantee is used. A condition that has to be satisfied: The buyer in the export transaction to be financed must be domiciled outside the European Union
In addition to making the existing programme permanent, the Federal Government decided that the specific market test in relation to the final buyer is no longer necessary. Previously, it was required in the relationship of an export-financing bank with its foreign clients. Besides, the annual volume of the programme of 1.5 billion euros may be increase on a case-by-case basis if required. Moreover, it was made clear that the required minimum credit period of the export loan is two years instead of three.
Applicants can submit applications for the Securitisation Guarantee for the KfW Refinancing Programme digitally via the customer portal myAGA: