Commission publishes state aid recovery interest and reference rates applicable from 1 September 2018.

With the turn of the month over the weekend, updated state aid recovery interest rates and reference/discount rates applicable from 1 September 2018 will come into force for all EU Member States.Used as a proxy for the commercial interest rate that a borrower would pay a public authority were they borrowing on the open market, the reference rate is calculated by adding together the base rate and the margin.Typically, a public authority will add 100 basis points to the base rate to get the discount rate, however more than 100 basis points may need to be added depending upon the credit history/rating of the end user.The applicable rate for Denmark has been reduced while the interest rate for Hungary has increased since the last published rate, which was applicable from 1 August 2018.The rates for all other Member States have remained the same.The full text of the Communication can be accessed here.