European Commission Approves Italian Guarantee Scheme Amendment for Trade Credit Insurance

Strategic Insights -

The European Commission has approved 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 amendment, which includes an up to Euros3 billion budget increase, was approved under EU State aid rules to limit the risks insurers are facing by offering trade credit insurance to customers.

Key Takeaways:

  • The Italian guarantee scheme, now extended until 31 December 2023, ensures trade credit insurance continues to be available to companies, reducing their immediate liquidity needs.
  • The scheme's budget has been increased by up to Euros3 billion, allowing for the extension of the period during which aid may be granted and the introduction of a longer deferral payment for energy bills by customers.
  • The Commission found the amended scheme compatible with EU Treaty principles, recognizing that the EU economy is experiencing a serious disturbance.
  • The scheme is targeted to remedy a serious disturbance to the Italian economy, with trade credit insurers committed to maintaining the same level of protection and lowering premiums compared to a situation without the measure.
  • The guarantee is limited to trade credit originated until the end of this year and is open to all credit insurers in Italy.
  • The guarantee mechanism shares risk between insurers and the State, up to a volume of Euros5 billion.

Statistics:

  • Up to Euros3 billion budget increase for the Italian guarantee scheme.
  • The scheme is open to all credit insurers in Italy.
  • The guarantee mechanism shares risk between insurers and the State, up to a volume of Euros5 billion.
  • The extension of the scheme's period until 31 December 2023.
  • The longer deferral payment for energy bills by customers.

Sources:

  • European Commission press release, "European Commission approves Italy's guarantee scheme for trade credit insurance," [IP/23/1484](https://ec.europa.eu/commission/presscorner/detail/en/ip_23_1484).