Earlier today, the European Commission announced the extension of its authorization of the Portuguese bank guarantee and bank recapitalization measures, as well as the Spanish recapitalization measures, until December 31, 2010. The Portuguese guarantee and recapitalization schemes were originally approved on October 29, 2008 and May 20, 2009, respectively, and the Spanish recapitalization scheme was originally approved on January 28, 2010.
The extended Portuguese guarantee scheme requires banks to pay higher premiums for state-granted guarantees, in order to incentivize banks to refinance themselves without state support.
The Commission has already extended its authorization of bank guarantee schemes in Sweden, Germany, Austria, Latvia, Ireland, Spain, Denmark, The Netherlands, Slovenia, Greece and Poland under similar conditions.
