The European Commission will defy national pressure and stick to its main demands on the conditions for state aid to the bank sector when it publishes new guidelines shortly, EU sources said.
EU Competition Commissioner Neelie Kroes is expected to issue the guidelines on Monday amid calls to the EU executive to approve bank support planned by France, Germany, Austria and others in the wake of the financial crisis.
One bone of contention is the price banks will ultimately have to pay for the state help, with the Commission currently pushing for higher rates than those proposed by governments.
Kroes said in a speech on Friday that for healthy banks the Commission accepted a pricing formula developed by the European Central Bank (ECB) which officials estimate sets a repayment rate of around 6-9 percent.
She also repeated her view that this had to be adjusted upwards depending on the risk profile of each beneficiary bank.
"That will not change. Kroes will not budge on that," one EU source familiar with the guidelines told Reuters.
The Commission was unlikely on Monday to recommend a single rate, but Kroes has privately favoured a figure around the 10 percent mark, the source said.
That compares with German proposals of rates of 5.5 percent and 8.5 percent for two tranches of cash totalling eight billion euros in support for Commzerbank. Austria is asking for a rate of eight percent and repayment after five years at face value for state aid to Erste Bank.
"The cost of capital is one of the main factors on which banks compete, so we must ensure that such state recapitalisations do not become a permanent feature of European financial markets," Kroes told the event in Luxembourg.
Separately, EU Monetary Affairs Commissioner Joaquin Almunia told an event in Paris on Friday that he expected the Commission to decide on whether to approve France's 10.5 billion euro bank aid plan ahead of a Dec. 11-12 EU summit in Brussels.
"I have strong hopes that the recapitalisation plan submitted by the French authorities will be approved by the European authorities extremely rapidly," said French Economy Minister Christine Lagarde, who was sitting alongside Almunia.
A second EU source said the new guidelines would introduce some extra flexibility, but with conditions attached.
"This a tweaking of the rules to deal with the effects on the real economy, not a rewriting of the rules," the source said.
"But this will be strict and the banks must make sure they make whatever credit they get from governments available. The rules will be more flexible, but don't expect anything too spectacular."
