The Competition Protection Council, at its first meeting of the new term, made a decision on a new methodology for determining the reference and discount interest rates in accordance with the Decision of the Government of the Republic of Croatia on the publication of rules for determining the reference and discount rates, as announced by the Competition Protection Agency.
The reference interest rate is applied as a marginal interest rate when determining whether a certain loan is granted under conditions more favorable than market conditions and as a discount rate when calculating the present value of granted state aid. According to the new methodology, the basic reference interest rate is calculated based on the average interest rate on treasury bills of the Ministry of Finance with a maturity of 364 days. The calculated basic rate is increased by a risk margin, depending on the credit rating of the specific entrepreneur and the offered security instruments.
The basic interest rate on treasury bills of the Ministry of Finance for 2008 is 5.55 percent, while the basic reference interest rate for 2009 will be calculated based on the yields recorded in September, October, and November of this year. For example, based on this methodology, the reference interest rate increased by the reference risk margin and offered security instruments for an entrepreneur with a good credit rating and average security instruments this year amounts to 6.55 percent. The calculated reference interest rate will apply to all future individual state aids and state aid programs and will come into effect eight days after the Council’s decision is published on the Agency’s website.
At the same time, providers of state aid, who grant aid to which the reference interest rate applies, are required to align existing state aid programs with the new methodology for calculating the reference interest rate by no later than December 31, 2008. (Hina)
