EU approves Greek aid to credit institutions

BRUSSELS, Nov 19 (Reuters) - Greece received approval from EU competition authorities on Wednesday to provide aid to credit institutions in response to the global financial crisis.

"The package would provide eligible credit institutions with new capital and securities which can be converted into liquidity with the ECB," the European Commission said in a statement.

The aid includes guarantees on short and medium term newly issued debt, under strict conditions.

"As the previous schemes, we have been able to approve the Greek package in a relatively short time," EU Competition Commissioner Neelie Kroes said in the statement.

"Nevertheless intense discussions took place in order to align the conditions of the package on our framework for assessment," she added.

The package of measures proposed by Greek authorities include a recapitalisation scheme to make available new capital to credit institutions in exchange of preferential shares.

It also includes a guarantee and securities scheme that provide against remuneration government bonds to credit institutions to enhance their access to liquidity. (Reporting by Bate Felix, editing by Darren Ennis)