Brussels, October 13, 2025 – The European Commission (EC) has concluded that the state aid rules on guarantees remain effective in ensuring predictability and legal certainty but need updating to reflect market developments and simplify compliance, particularly for smaller firms.
The findings are set out in a Staff Working Document evaluating the 2008 Guarantee Notice, which outlines how the EC assesses state guarantees on loans and other financial instruments. The review found that while the framework remains valuable, it can underestimate or overestimate the aid element due to changes in interest rates and capital requirements, and that compliance can be complex and costly for smaller Member States.
Key Findings
The EC said the rules continue to provide a clear framework for assessing whether guarantees are granted on market terms and, therefore, free of aid. It found that current methods may underestimate aid levels because of shifts in financial markets and updated capital requirements for lenders.
For smaller firms, the simplified “safe harbour” mechanism may overstate aid amounts, particularly for riskier SME guarantees. Lenders also do not always pass the benefits of reduced risk from state guarantees to borrowers.
The authority also noted that reporting obligations remain burdensome and data on approved guarantee measures are insufficient for proper oversight. Finally, some provisions are inconsistent with newer State aid guidance, including the Notice on the Notion of Aid.
Next Steps
The EC plans to launch a formal review of the Guarantee Notice in early 2026, aiming to complete revisions by June 2027. Stakeholders will be invited to comment through a public consultation.
Adopted in 2008, the Guarantee Notice helps Member States design and assess guarantee schemes by defining when public guarantees are market-based and free of aid.
Executive Vice-President Teresa Ribera said the framework “remains a useful tool to help member states provide guarantees in line with EU rules,” but should be updated “to reflect market developments and reduce complexity.”
Source: https://ec.europa.eu/commission/presscorner/detail/en/ip_25_2355
