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EU Clears Extension of Slovenia's Bank Support Measures

Brussels, 30 June (STA) - The European Commission has extended its approval of the Slovenian bank guarantee scheme until the end of the year. However, banks will have to pay higher premiums for state guarantees, officials in Brussels said on Wednesday.

In addition, banks which will continue to rely heavily on those guarantees will be subject to a stress test.

"This is to encourage banks to finance themselves without state support and to limit distortions of competition," the Commission said in a press release.

The Slovenian guarantee scheme for credit institutions was initially approved in December 2008 and was then extended in June and December 2009.

The Commission said that the scheme was "well targeted, proportionate, limited in time and scope and includes higher premiums for the fee paid to the government".

Bank guarantee schemes have been extended under the same conditions also to Sweden, Germany, Austria, Latvia, Ireland, Spain and Denmark.

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