II-6.1 : State Aid: The European Commission approves the Swedish export-credit insurance scheme

Context and Summary

Pursuant to the Temporary Framework of the European Commission for State aid measures, the European Commission authorised the Swedish export-credit insurance scheme, adopted in order to limit the adverse impact of the financial crisis on exports. According to Competition Commissioner Neelie Kroes, "The Swedish scheme provides exporting firms with the insurance cover they need and, at the same time, contains adequate safeguards to avoid the crowding-out of private companies from the credit insurance market". The Swedish system will therefore provide companies established in Sweden with short-term export credit insurance, whenever these companies have not been able to find insurance coverage on the private market. The EC ascertained that such a system complies with the conditions set up in the Temporary Framework, especially the following criteria: (i) Sweden provided for sufficient proof that such a cover was unavailable on the private insurance market as a consequence of the financial crisis and (ii) the premiums charged by the Swedish government agency in charge of delivering the insurance coverage are in line with the premiums on the private market, and encourages exporting firms to use private insurers when such cover is available on the private market. 

Brief commentary

The first conclusion that can be drawn from the decision of the EC is the reinforcement of the role of the State in a context of economic crisis. While Competition Law is based on both a neutral conception of economic agents and a limitation of State intervention, the financial crisis has toppled these founding principles and opened the door to a new interpretation of competition, or more precisely, a new set of principles. Systemic risk and its potential consequences for the global economic system have therefore deeply shifted the appreciation of competition law, enabling States to regain power in diverse economic areas. A parallel can be drawn with the decision of the French {Cour d’Appel} (Court of Appeals) on the Steel Cartel that divided by 8 the fine ruled by the French {Autorité de la Concurrence} (Competition Authority). Although the decision indicates that Brussels would have levied a 1.5 to 1.8- fine on such a cartel, it does not believe that the French Finance Minister would decide to appeal its decision to the Cour de Cassation (French Court of Cassation). The reasons for these doubts are both the economic context currently facing companies, and the money that was granted by the State. Increasing fines on companies would increase fines on States that helped them, a reason that may influence the Finance Minister’s decision.