EU Commission Prolongs Guarantee Scheme for Greek Banks

Αssociated Press

FILE - Athens customers wait for the National Bank to open. (AP Photo/Petros Giannakouris)

ATHENS - The European Commission on Thursday announced it has authorised the prolongation of the Greek guarantee scheme for credit institutions until May 31, 2020 under EU state aid rules.

In an announcement, the EU's executive body said the liquidity situation of the Greek banks is gradually improving, but challenges still remain. In this context, the Commission has found that the prolongation of the guarantee scheme is in line with EU state aid rules, i.e. the 2013 Banking Communication, in particular because the prolonged measure is targeted, proportionate and limited in time and scope. The Commission is authorising guarantee schemes on banks' liabilities for successive periods of six months in order to be able to monitor developments and adjust conditions accordingly. The scheme is available for banks with no capital shortfall. The Greek guarantee scheme was initially approved in November 2008. The authorisation of the scheme was prolonged several times, the last time in June 2019.