Brussels, 06/10/2010 (Agence Europe) - The European Commission intends to continue to allow member states to grant special aid to accompany restructuring plans during this time of crisis until the end of 2011. However, conditions, particularly for banks, will be toughened. That is what Competition Commissioner Joaquín Almunia, appearing with his Internal Market colleague Michel Barnier, told the European Parliament (EP) economic and monetary affairs committee on Monday 1 October.
The regime to face up to the crisis, in place since 2008, relaxed competition rules on public aid. It will be progressively stiffened next year with a view to a return to normal in 2012. Thus, with regard to the real economy, some forms of aid will disappear, while others, such as low interest rate loans to certain sectors will become more expensive. Aid conditions for banks will become gradually more difficult: the cost of state guarantees will continue to increase, with a re-evaluation in mid-2011, Almunia announced. In addition, from now on, all recapitalised banks and those in receipt of public support for doubtful assets will have to submit a restructuring plan to the Commission. Hitherto, this only had to be done when aid exceeded 2% of their risk-adjusted assets.
The aim, said Barnier, is to “create a new, responsible system with which to avoid future crises”.
Various MEPs fired questions at the two commissioners, notably on the benefits of the emergency measures for the real economy and citizens, and on the different ways the guidelines on state aid to banks were applied in member states. Almunia replied that the figures showed that credit was being passed on to the real economy but that banks would need healthier balance sheets and less risk aversion before such transfers pick up more seriously. He said, too, that the financial markets in which the various banks operate were different and that the guidelines on state aid had to take account of that fact. (F.G./transl.rt)