**Avis juridique important**

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# 51997XC0909(01)

**Commission notice on the method for setting the reference and discount rates***Official Journal C 273 , 09/09/1997 P. 0003 - 0003*

Commission notice on the method for setting the reference and discount rates (97/C 273/03)

(Text with EEA relevance)

(This notice replaces the previous notices on the method for setting the reference and discount rates, and in particular the Commission notice (1) of 10 August 1996)

For the purposes of Community monitoring of State aid as required by the EC Treaty, the Commission uses various parameters, including the reference and discount rates.

Those rates are used to measure the grant equivalent of aid that is disbursed in several instalments and to calculate the aid element resulting from interest subsidy schemes for loans. They are also used in implementing the de minimis rule (2) and for the repayment of illegal aid (3).

The reference rates are supposed to reflect the average level of interest rates charged, in the various Member States, on medium and long-term loans (five to ten years) backed by normal security.

The Commission has decided to replace the current system of setting the reference rates, and to use instead one based on the five-year interbank swap rates, plus a premium.

As from 1 August 1997, the reference rates will be set as follows:

- in the case of all Member States except Italy, Portugal and Greece, the indicative rate is defined as the five-year interbank swap rate, in the relevant currency, plus a premium of 0,75 point (75 basis points),

In the case of Italy and Portugal, the indicative rate is defined as the five-year interbank swap rate, in the relevant currency, plus a premium of 200 basis points.

In the case of Greece, the indicative rate is defined as the one-year interbank rate (Athibor), in drachmas, plus a premium of 300 basis points;

- the reference rate is deemed to be equal to the average of the indicative rates recorded in the preceding September, October and November,

- the reference rate is adjusted again in the course of the year if it differs by more than 15 % from the average of the indicative rates recorded over the last known three months.

It should also be noted that:

- the reference rate thus determined is a floor rate which may be increased in situations involving a particular risk (for example, an undertaking in difficulty, or where the security normally required by banks is not provided). In such cases, the premium may amount to 400 basis points or more if no private bank would have agreed to grant the relevant loan,

- the Commission reserves the right, if necessary for examining certain cases, to use a shorter base rate (for example, Libor one-year rate) or a longer base rate (for example, the rate on ten-year bonds) than the five-year interbank swap rate,

- in cases where the five-year interbank swap rate is not available, the base rate will be set at the level of the rate of yield on five-year State bonds, plus a premium of 25 basis points.

Reference rates will be made known by the Commission on Internet at the following address:

http://europa.eu.int/en/ comm/dg04/aid/tauxref.htm

(1) OJ C 232, 10. 8. 1996, p. 10.

(2) OJ C 68, 6. 3. 1996, p. 9.

(3) OJ C 156, 22. 6. 1995, p. 5.