HispanicBusiness

Volume of national support to the financial sector actually taken by banks between October 2008 and December 2011 amounted to around 1.6 trillion euros (about 2.1 trillion U.S. dollars), said the European Commission Friday.

According to the State Aid Scoreboard released by the Commission, over 67 percent of the bulk came in the form of State guarantees on banks' wholesale funding. Three member states accounted for nearly 60 percent of the total aid used; those are the United Kingdom (19 percent), Ireland (16 percent) and Germany (16 percent).

Support to the real economy on the basis of temporary crisis rules dropped to 4.8 billion euros in 2011, over 50 percent lower than in 2010, result of low demand from companies and the budgetary constraints of most EU member states.

Total non-crisis aid decreased and stood at 64.3 billion euros in 2011 or 0.5 percent of EU GDP. Those aids continued to focus on less distortive horizontal objectives, like aid for research and innovation, environmental protection and providing risk capital to SMEs.

To minimise the impact of the tightening in credit conditions, EU member states also granted aid to the real economy under a temporary framework adopted by the Commission at the end of 2008.

The main support measure used was a one-off subsidy of up to 500,000 euros per company, which was replaced in 2011 by the normal 200,000 euros amount that can be granted to a company over three years without prior clearance by the Commission.

This was followed by subsidised loan interests or guarantees, reduced interests for environmentally-friendly investments and risk capital aid. The temporary framework expired on Dec. 31 2011. (1 euro = 1.32 U.S. dollars)