Brussels - The European Commission on Wednesday approved a series of temporary guidelines designed to make it easier for small and medium-sized businesses (SMEs) to access funds during the credit squeeze.

Under the new rules, applicable until the end of 2010, European Union governments will be allowed to grant eligible SMEs up to 500,000 euros (687,000 dollars) in direct aid, without first having to seek the commission's approval.

Governments are also encouraged to provide subsidized loans to companies producing green products, while risk capital aid is increased from 1.5 million to 2.5 million euros per year.

"These changes are justified given the exceptional economic conditions," EU Competition Commissioner Neelie Kroes said.

"State aid must be targeted at allowing companies, especially SMEs, to overcome financial problems arising from the current credit squeeze without worsening the situation for other companies, thereby aggravating the crisis," the commissioner said.

The EU's executive arm in Brussels has come under intense pressure from governments to relax its strict rules on state aid at a time of financial and economic crisis.

The rules approved on Wednesday do not apply to large companies such as German carmaker Opel, which is seeking billions of euros in loan guarantees from the government.

More than 90 per cent of all EU businesses are SMEs. (dpa)