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• EU nations win a year’s reprieve on state aid
Date 05/10/2010 13:10  Author webmaster  Hits 990  Language Global
05 OCT 2010

By Nikki Tait in Brussels | Financial Times

European governments will be allowed to provide soft loans and other concessionary support to their banking and industrial sectors for one more year because of the lingering effects of financial crisis, according Europe’s top competition regulator.

But in an interview with the Financial Times, Joaquín Almunia, European Union competition commissioner, said he would reinstate the much tougher “normal” state aid regime from the beginning of 2012.

European Union officials eased up considerably on the region’s state aid rules in late-2008, allowing governments to pump billions of euros in soft loans, state guarantees and direct aid to both banks and companies hit by the financial turmoil and subsequent credit shortages.

But those concessionary rules are due to expire at the end of 2010, prompting much debate among member states and businesses about whether – or to what extent – they should be renewed.

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