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July 20, 2005

EC approves Dutch shipbuilding loan guarantee scheme

The European Commission has authorized, a state shipbuilding loan guarantee scheme introduced by The Netherlands.

Guarantees will be granted to financial institutions providing loans to Dutch shipyards in order to finance the construction of ships.

Guarantee premiums will be charged and vary according to the risk of the loan. The premium level will cover the risks of payments and the administrative costs generated by the scheme. Consequently, the scheme should be self-financing. This measure therefore does not constitute state aid and does not threaten to distort competition in the single market.

EU Competition Commissioner Neelie Kroes said: "Financial institutions remain reluctant to grant financing to shipbuilding, even where it has been restructured and now specializes in high technology ships. I am therefore happy to approve a scheme which is free of State aid and which can help Dutch shipyards to receive financing. "

The state guarantees will amount to a maximum of 80% of the loan. Loans to yards in difficulties will be automatically excluded from this scheme.

Premiums charged will vary according to the risk of the loan. The premium level will be revised (and adjusted, if necessary) on a yearly basis in order to verify that it covers the risks of payments and the administrative costs generated by the scheme.

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