Permanent Discount Cuts Plane Export Fees

What the problem is
The way the EU calculates the extra fee (Market Reflective Surcharge, MRS) that aircraft exporters pay has been upset by a change in the reference interest rate.

• LIBOR (the old benchmark) was stopped in 2023.
• Moody’s now reports Median Credit Spreads (MCS) based on SOFR, which makes MCS higher.
• A higher MCS raises the MRS, making aircraft exports more expensive.
• In 2023 a temporary “Credit Adjustment Spread” (CAS) of –29 basis points (bps) was added to MCS for one year to counter this effect.

How the problem is being solved
The Council will adopt a permanent CAS of –29 bps in the Sector Understanding on Export Credits for Civil Aircraft (ASU).

• The ASU is part of the Arrangement on Officially Supported Export Credits, a gentlemen’s agreement between the EU and 10 other countries.
• The Commission represents the EU in the ASU.
• The new CAS will be built into the formula that sets the MRS, giving exporters a predictable, lower surcharge.

What changes as a result of this document

1. ASU amendment – Section 2 of Appendix II (Minimum Premium Rates) will now include a fixed CAS of –29 bps.
2. Formula –

• MRS = B × {[0.5 × (MCS – CAS)] – RBR}
• B varies from 0.7 to 0.35 by risk category.
• MCS is a 90‑day moving average of Moody’s Median Credit Spreads.
• CAS = 29 bps.
• RBR is the risk‑based rate.

3. The decision is binding on the EU and will be published in the Official Journal.
4. It will influence the EU’s Regulation (EU) No 1233/2011 on export credits.

Other important information

• The Arrangement on Officially Supported Export Credits is a long‑standing agreement (since 1978) that aims to level the playing field for exports by removing subsidies.
• The ASU has 11 participants: Australia, Brazil, Canada, the EU, Japan, Korea, New Zealand, Norway, Switzerland, the UK, and the US.
• The legal basis for the decision is Article 207(4) TFEU (common commercial policy) together with Article 218(9) TFEU (positions taken on behalf of the Union).
• The decision will take effect immediately upon adoption.