Brussels, 23/07/2010 (Agence Europe) - On Friday 23 July, the European Commission decided to extend until 31 December 2010 its authorisation under EU state aid rules of the Portuguese bank guarantees and bank recapitalisation measures and of the Spanish recapitalisation measures in favour of the banking sector. The Commission recently extended its authorisation in Sweden (guarantee scheme), Germany, (guarantees, recapitalisation and other), Hungary (recapitalisation and liquidity scheme), Austria (guarantees, recapitalisation and other), Latvia (guarantee scheme), Ireland (guarantee scheme), Denmark (guarantee scheme), the Netherlands (guarantee scheme), Slovenia (guarantee scheme), Greece (guarantees, recapitalisation and bond loan scheme) and Poland (recapitalisation, guarantees and liquidity scheme). All these schemes have been extended by six months.
Portuguese guarantee scheme. The Commission has authorised extension of the Portuguese guarantee scheme until 31 December 2010. The scheme was initially approved on 29 October 2008 and prolonged on 22 February 2010. The Commission considers the scheme to be in line with its guidance on state aid to banks during the crisis and the recent adjustment of the rules for bank guarantees, endorsed by the 18 May 2010 EU Economic and Financial Affairs Council (Ecofin Council) on the phasing out of support measures for the financial sector. The extended guarantee scheme is well targeted, proportionate and limited in time and scope. It also includes higher premiums for state guarantees, thereby giving banks the incentive to refinance on the markets without state support and limiting undue distortions of competition.
Portuguese recapitalisation scheme. The Commission has authorised the extension, until December 2010, of the Portuguese recapitalisation scheme for credit institutions. The scheme was initially approved on 20 May 2009 and extended on 17 March 2010. Extension of the scheme is in line with Commission communications on support measures for banks during the financial crisis.
Spanish recapitalisation scheme. The Commission has authorised the extension until 31 December 2010 of the Spanish recapitalisation measures in favour of the banking sector. The scheme, known as “FROB”, was initially approved on 28 January 2010 and expired on 30 June 2010. The scheme has been amended so as to permit individual recapitalisations. The Commission found the extension of the measure to be in line with its guidance on support measures for banks during the financial crisis. On 28 June 2010, the Commission had already authorised the extension until 31 December 2010 of the Spanish guarantee scheme.
The Commission notes in a communication that: “A majority of support schemes for financial institutions, put in place in 2008 and 2009 to ensure financial stability, have been periodically extended, generally for six months, when requested by the member states concerned and justified”. (L.C./transl.jl)