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Document Ares(2022)5974844

Commission Staff Working Document on the Evaluation of the Guarantee Notice



Title of the evaluation

State aid rules for assessing state guarantees on loans – evaluation

Lead DG – responsible unit

DG Competition – Units D3-D4

Indicative timetable

(planned start date and completion date)

Start date: Q3-2022

Planned completion date: Q1-2024

Additional information

Specific aid instruments – State Guarantees:

This document is for information purposes only. It does not prejudge the final decision of the Commission on whether this initiative will be pursued or on its final content. All elements of the initiative described by the document, including its timing, are subject to change.

A. Political context, purpose and scope of the evaluation

Political context

The Guarantee Notice describes how the Commission assesses state guarantees on company liabilities – which can be a form of state aid – both in the form of individual guarantees and guarantee schemes.

In particular, the Notice sets out qualitative criteria and references to market benchmarks for individual guarantees, safe harbour guarantee premiums for aid-free state guarantees, if granted to small and medium-sized enterprises, and guidance to design aid-free guarantee schemes for all types of firms, which can also be used to determine the aid element in guarantees that involve aid.

State aid legislation, and notably the General Block Exemption Regulation (GBER) and de minimis Regulation, require aid to be transparent. This means it must be possible to calculate precisely the gross grant equivalent of the aid ex-ante, without any need to undertake a risk assessment. By providing guidance to Member States to help them establish market-compliant guarantee premiums and to determine the aid amount (as the difference between the charged premiums and the market premiums), the Guarantee Notice helps ensure a clear and predictable framework for granting state guarantee loans.

The Guarantee Notice was last revised in 2008. It does not contain any fixed review clause or expiry date and has not been evaluated in any ‘fitness check’ since its last revision. Thus, there is a need to evaluate the Guarantee Notice for the following reasons:

I.Market conditions have changed significantly since 2008. The global financial crisis has led to an environment of low interest rates, while currently inflationary pressure has increased in the wake of the COVID pandemic and the Russian invasion of Ukraine; 

II.Capital requirements have been increased following the global financial crisis. Moreover, risk management practices by financial market participants have evolved in the past decade; and,

III.EU governments have notified the Commission of a large number of guarantee methodologies since the last revision of the Guarantee Notice in 2008.

Thus, there is considerable evidence available to justify an assessment of whether the Guarantee Notice is still fit for purpose.

Purpose and scope


The main goal of the evaluation is to check whether the Guarantee Notice is still fit for purpose. This requires us to assess whether the Notice performed well, whether it has facilitated access to finance in an effective and efficient way, both for small/medium firms and larger companies, and whether EU countries have had difficulties in interpreting it or implementing schemes that are in line with it.

In this regard, the evaluation will analyse how the Notice has functioned over time and to what extent it achieved its objectives of:

I)providing guidance on market-compliant guarantee premiums to rule out the presence of state aid and prevent distortions of competition;

II)increasing legal certainty for stakeholders and increasing transparency on the Commission’s policy, so that its decisions are predictable and ensure equal treatment;

III)introducing easy-to-apply rules for small and medium-sized enterprises to improve their access to finance.


The evaluation covers only the Guarantee Notice and the implementation of guarantee methodologies approved by the Commission. It will not cover any other secondary state aid legislation.

Timeframe & content

The evaluation covers the period since the entry into force of the Guarantee Notice in 2008 until the present day.

It will assess all types of state guarantees covered by the Guarantee Notice, such as individual guarantees to all types of companies, guarantee schemes for small and medium-sized enterprises and guarantee schemes for all types of companies. The assessment will cover guarantee measures that involve an element of aid as well as those with no aid.

Evaluation criteria

The evaluation will assess the following five criteria:


·To what extent has the Guarantee Notice contributed to determining market-compliant guarantee premiums?

·How effective were the guarantee measures using the Guarantee Notice in limiting distortions of competition in product markets?

·How effective were the guarantee measures using the Guarantee Notice in limiting distortions of competition between financial intermediaries and distortions of prices in credit markets?


·To what extent have the requirements of the Guarantee Notice been proportionate to the cost of implementing guarantee schemes?

·Have the guarantee measures using the Guarantee Notice helped simplify the implementation of schemes for small and medium-sized enterprises?


·To what extent has the Guarantee Notice remained relevant over time with regard to macroeconomic, financial stability and regulatory developments since 2008?


·To what extent is the Guarantee Notice internally coherent (i.e. how much do the rules in the Guarantee Notice complement each other) and externally coherent (i.e. how consistent is the Notice with other EU legislation)?

EU added value

·Has the Guarantee Notice provided added value compared to a situation without such guidance?

B. Better regulation

Consultation strategy

The aim of the consultation activities is to gather evidence for evaluating the Guarantee Notice, in the light of significant changes in market conditions, and the resulting risk that certain applications of the Notice by EU countries are not aligned with current market benchmarks.

At the same time, we need to ascertain the extent to which the Notice has facilitated access to finance in an effective and efficient way, especially for small and medium-sized enterprises.

The consultation activities will involve:

·A 12-week online public consultation aimed at the general public (launched as part of this call for evidence), with high-level questions in the 24 official EU languages, where respondents can reply in each of the 24 official EU languages.

The public consultation will be accessible through the Commission’s “Have your say” web portal and it will be promoted through the Commission’s official communication channels (including social media) and at selected events and in speeches.

The results of the public consultation will be made public in a factual summary report, published on the “Have your say” portal.

·Targeted consultations in the form of a request for information to EU governments and a targeted questionnaire.

§The request for information will gather the necessary consolidated data on state guarantees and check the market conformity of the largest transactions. It will be submitted to EU countries via their Permanent Representations to the EU, and they will be able to reply in all 24 official EU languages. 

§The targeted questionnaire is aimed at selected stakeholders directly involved in or affected by the provision of state guarantees or with relevant expertise in the field of credit risk. It will feature specific questions of a more technical nature and will be available in English only. However, respondents will be able to submit replies in all 24 official EU languages. This consultation will be accessible through DG Competition’s consultations webpage.

A summary of the results of the planned consultation activities will be reflected in a synopsis report that will be annexed to the Staff Working Document covering the evaluation.

Why we are consulting? 

The Guarantee Notice has not been reviewed since its latest revision and publication in 2008. Therefore, the Commission wishes to see whether it has facilitated access to finance in an effective and efficient way, both for small and medium-sized enterprises and larger companies, and whether EU countries had any difficulties interpreting it and have implemented schemes that are in line with it.

The evaluation will collect evidence on the Guarantee Notice’s effectiveness, efficiency, coherence and EU added value. It will also assess the relevance of the Notice, in particular as some of the reference market data (safe harbour premiums) could be obsolete in the light of changes in market conditions.

The Guarantee Notice might have generated unintended consequences, such as selective advantages for financial intermediaries, distortions of competition between companies in different EU countries, or the crowding out of private investors.

The consultation activities for the evaluation will collect views and experiences from all stakeholders.

Target audience

The main target audience of the evaluation is the managing and implementing authorities in EU countries. However, the evaluation will also approach guarantee institutions and financial intermediaries that provide guarantees and other forms of credit protection. It will also include financial industry associations and market participants in the credit and credit derivative markets.

The Commission also finds it very important to hear the views and experience of companies of all sizes and business associations that represent them.

Finally, the evaluation would like to build on feedback from researchers and academia.

Data collection and methodology

The Commission does not have sufficient concrete data available to evaluate the Guarantee Notice. This is because the Commission decisions under section 3.4 of the Guarantee Notice relate only to the methodologies and not to their subsequent implementation.

Accordingly, the Commission has neither full information on the actual guarantee schemes applying these methodologies over time nor any detailed data on the transactions under these schemes. For this reason, the Commission will launch a request for information to the EU countries, as described above.

In addition, the Commission will launch a tender for a specific report on the Guarantee Notice. The report will be produced by an external contractor from Q4 2022 on and will assess at least:

·the impact of the Notice on the credit markets, more concretely, how effective and efficient the application of the Notice has been in achieving the general objective of ensuring an integrated and efficient single market, entailing both free and fair competition between financial intermediaries and between companies on product markets;

·how the applied pricing systems worked, compared to optimal pricing systems for state guarantees, which are consistent over time, have objective and observable reference (market) parameters as input, and minimise the potential for individual selective advantages being given to the beneficiary of the guarantee;

·whether the simplified solution for measures targeted at small and medium-sized enterprises achieved the right balance between simplicity and accuracy; 

·the internal coherence of the rules in the Guarantee Notice and the consistency of the Notice with other EU state aid legislation and guidance.

The report will be annexed to the evaluation.

The consultation activities and the specific report will be complemented by:

·Available statistical data;

·The Commission’s experience in specific past cases.