Brussels, 10/11/2009 (Agence Europe) - On 10 November 2009, the European Commission opened an indepth inquiry into the state guarantee on a €450 million loan granted to Banco Privado Português. The measure was initially approved by the Commission in March this year, but Lisbon extended it without notifying the Commission. Also, the Commission is not convinced that some of the conditions stipulated during approval in March have been duly applied.
The loan itself consists of €450 million put forward by six Portuguese banks to Banco Privado Português. State aid consists in a guarantee for the loan, set in place in December 2008. The Commission approved the measure three months later but considered the guarantee premium requested by the State was too low. The Commission therefore made its approval subject to presentation by Portugal of a BPP restructuring or liquidation plan. In June 2009, the six-month period of authorisation came to an end. Portugal, however, extended the measure for a further six months without warning the Commission. The latter doubts that the guarantee, especially in its extended form, is in line with the regulation set in place to help national authorities manage the crisis “in relation to both the duration and the pricing of the measure”, the press release states. This will be the subject of the investigation announced on Tuesday. The Commission has expressed concern that it has had no news from Lisbon concerning implementation of the conditions mentioned in the March authorisation. It has therefore addressed an injunction to Portugal to present a restructuring or liquidation plan for BPP. (C.D./transl.jl)