THE TREASURY is expecting imminent EU approval for its £20-40bn credit easing programme this week ahead of the budget, according to a Treasury source.
The government has faced months of negotiating a torturous path between banks’ requirements and European state aid rules that impose strict parameters on stimulus programmes that target particular sectors of a country’s economy.
As part of those conditions, participating in any such scheme must incur a hefty fee for banks, which had threatened to derail the policy.
But the Treasury is believed to have worked out a solution so that most of the UK’s major banks are willing to take part.
The scheme aims to make credit 100 basis points cheaper for small firms.