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PR(02)27: The EFTA Surveillance Authority proposes appropriate measures to Norway with regard to State aid in the form of guarantees under the Act on State Enterprises (“Lov om Statsforetak”)

5.12.2002

The EFTA Surveillance Authority decided yesterday to propose, as an appropriate measure, that Norway take the necessary measures to eliminate any incompatible aid resulting from the Act on State Enterprises (“Lov om Statsforetak”) with effect from 1 January 2003.

According to the relevant provision of the Act on State Enterprises, the Norwegian State is under an obligation to cover losses incurred by State enterprises if the obligations cannot be covered by the enterprises’ own funds. This form of guarantee improves the creditworthiness of the State enterprises and results in more favourable funding terms than they would have obtained otherwise. Without a proper guarantee premium, such guarantees also imply State aid to undertakings organised under this Act.

In June 2001, the Authority’s services informed the Norwegian authorities that the unlimited guarantee provided for under the Act on State Enterprises was found not to be in line with the conditions laid down in the Authority’s guidelines on aid in relation to State guarantees (“Guidelines on State guarantees”).

As from July 2002, the Norwegian authorities requested that several State enterprises pay a guarantee premium. In October 2002, the Norwegian Government presented proposals for amendments to the Act on State Enterprises, consisting of the abolishment of the unlimited State guarantee as from 1 January 2003 as well as transitional arrangements for all the State enterprises’ existing obligations.

The introduction of a guarantee premium has reduced the amount of aid element. But the Authority has noted that the level of premiums was not established in accordance with the principles of the Guidelines on State guarantees.

As regards the transitional arrangements proposed by the Norwegian Government with respect to the State enterprises’ existing obligations, the Authority observed that due to the lack of a proper justification, the proposed transitional arrangements could not be regarded as compatible with the EEA State aid rules.

Against this background, the Authority considered it necessary to propose to the Norwegian Government appropriate measures consisting of the abolishment of any incompatible aid contained in the Act on State Enterprises with effect from 1 January 2003.

This implies that, as from that date, undertakings organised under the Act on State Enterprises should no longer benefit from State guarantees which do not comply with the conditions established in the Guidelines on State guarantees. Given that the guarantee provided for under the Act on State Enterprises constitutes ‘existing aid’, the Authority’s decision does not require the Norwegian State to recover benefits that the State enterprises enjoyed in the past, but rather to abolish advantages resulting from the State guarantees for the future. The Norwegian Government is also asked to demonstrate that any transitional arrangements for existing obligations are objectively necessary and justified.

The Norwegian Government is asked to inform the Authority within six weeks whether it accepts the appropriate measures. 

For further information please contact Mr. Amund Utne on tel. +32-2-286 18 50 or Mrs. Alexandra Antoniadis on tel. +32-2-286 18 52.

5 December 2002




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