October 3 (SeeNews) - The European Commission said on Monday it has approved, under EU State aid rules, a Croatian methodology to calculate the premiums on state guaranteed loans for mid-caps and large enterprises granted under the Croatian Recovery and Resilience Plan.
“Under the calculation methodology approved today, guarantee premiums are linked to a combination of alternative pricing methodologies, which are based on either the borrowers' expected losses, appropriate credit default swap indexes, or the interest rates charged by the financial intermediary,” the Commission said in a press release.
The applicable guarantee premium cannot be lower than the prices indicated by each one of the alternative methodologies. This approach ensures that these premiums are adequate to remunerate the risks borne by the guarantor and are based on objective market benchmarks. The methodology will apply until October 3,2026.
Croatia's national recovery and resilience plan will be financed by 5.51 billion euro ($5.4 billion) in grants. Payments under the RRF are performance-based and contingent on the country implementing the investments and reforms outlined in its recovery and resilience plan.
($ = 1.0213 euro)