The European Commission said
it approved a guarantee system planned by the French government
to step up investment for its shipbuilding industry. Under the scheme, guarantees will be granted to financial institutions providing loans to French shipyards to finance the construction of large ships with a contract value above $51m. The state guarantee for the loans will reach a maximum of 80 pct. Guarantee premiums will be charged and vary according to the risk on a case by case basis. The premium level will cover the risks of payments and the administrative costs of the scheme, the EU executive added. The commission said the scheme does not constitute state aid and does not threaten to distort competition.