EU extends German bank guarantee scheme to end-2010

BRUSSELS, June 23 (Reuters) - European Union competition regulators have extended to the end of the year a German bank guarantee scheme that includes higher fees for lenders using the facility.

The European Commission, the EU competition watchdog, had approved the scheme in October 2008. The facility was amended two months later and had been due to expire at the end of June.

"The extended scheme features higher premiums to be paid by the banks for the guarantees granted by the state. This is to encourage banks to finance themselves without state support and to limit distortions of competition," a Commission statement said.

The EU executive also prolonged by six months to the end of the year a Hungarian recapitalisation scheme that makes available new capital to banks in exchange for preference shares. (Reporting by Foo Yun Chee, editing by Dale Hudson)