Joaquín Almunia, the European commissioner for competition, has said that EU governments will be allowed to continue providing support to banks and businesses for another year because of the economic situation.

In an interview with the Financial Times today, Almunia said it was not yet possible to return to a “normal” regime, referring to problems in the German and Irish banking sectors. 

He promised a return to the normal rules from 2012 onwards.

The European Commission agreed to ease the conditions for state aid to banks and businesses from September 2008 to offset the effects of the financial crisis, which hit banks hard, and of the subsequent economic crisis. These rules were due to expire at the end of 2010.

 “On present analysis, we are not yet in a position to return to a normal regime. We know there are still some institutions…that need this public support through public capital injections,” Almunia said, referring to Ireland’s difficulties and problems in the German banking sector.