Press Release: State aid: Commission approves Swedish state guarantees for Volvo Cars

The European Commission authorised, under the EC Treaty’s rules on state aid, plans notified by Sweden to provide guarantees that would enable Volvo Personvagnar (Volvo PV) to access loans from the European Investment Bank (EIB). The loans were to co-finance the development of environment-friendly cars. 90% of the guarantees to be provided by Sweden meet the conditions of the Commission’s Temporary Framework for state aid measures, which gives Member States additional scope to facilitate access to financing in the present economic and financial crisis. In particular, Volvo were to pay an adequate remuneration for the guarantee and provide sufficient securities in case the guarantee would be drawn. It was therefore compatible with Article 87(3)(b) of the EC Treaty, which permits aid to remedy a serious disturbance in the economy of a Member State. The remaining 10% will be provided on market conditions and therefore do not constitute state aid.