Brussels, 26/01/2001 (Agence Europe) - The European Commission has just sent a letter to the German authorities in which is states that it considers the guarantees - Anstaltslast and Gewahrtragerhaftung - granted to German States banks to constitute State aid and are as a result incompatible with Community law. This letter constitutes the first stage of the normal procedure for bringing existing aid schemes in line with this law. Today the ball is in the German court, which has four months to present its remarks on the Commission position.
The in-depth investigation carried out by the Commission comes to the conclusion that guarantees (see EUROPE of 28 July 2000) are susceptible of leading to distortions in competition to the extent that they improve the standard of the establishments signature, which benefit from it and thus, in principal, the conditions of financing, since the lenders require lower risk premiums. These benefits apply in particular for the activities in the (international) capital markets (for example the issuing of bonds or raising subordinate equity), derivatives and over the counter business., as well as interbank business. Moreover the Commission underlined that the distortion affects trade between Member States, as the single market for financial services is to a large extent achieved and there is strong competition between institutions of different countries. All the elements are thus gathered to consider Anstaltslast and Gewahrtragerhaftung to be State aid: these guarantees are granted through State resources, favouring certain companies, distorting competition and affecting intra-Community trade. The Commission feels that they cannot benefit from any exemption foreseen by Article 87 paragraph 1 of the Treaty and that it is not established that they represent a counterbalance to the provision of general interest services. (Let us recall that these establishments in question are the "Landesbanken", a certain number of specialised banks and some 580 building societies).