Brussels, 06/07/2001 (Agence Europe) - The European Union Banking Federation (EBF) firmly spoke against any transition period during which the German state banks ("Landesbanken") continue to enjoy guarantees from the State and encourages the European Union not to accept any delay from Germany. The EBF believes that the Landesbanken are presently putting pressure on the Commission in order to obtain a transition period of 10 years to, they apparently say, allow them to implement the structures need for the establishment of a new system. This time frame should enable them to continue to enjoy State guarantees, notes the EBF, which considers "surprising" that the German Banks call for a long transition during which it could continue to benefit the "Anstaltslast" and the "Gewahtragershaftung" before adjusting the EC Treaty system. "In the past they have always stated that the public guarantee system did not provide them with any competitive advantage over their private competitors. Why all of a sudden that need them 10 years to adjust to fair competition?", questioned the Federation, for whom the fact of being submitted to competition is entirely normal and must not be a pretext to slow the adjustment process. Maurizio Sella, President of the EBF, personally considers that such a debate is "Totally unacceptable. Even one year is too much. The Landesbanken knew in November 1999 (…) that public guarantees (…) were unacceptable for the Commission. So they had plenty of time to adjust to the new situation. Such illegal guarantees must be abolished at once and no transitional delays are to be applied", he stated.
As a reminder, the Commission had opened, following a complaint by the EBF, a formal procedure against the German state banks because the public guarantees enjoyed by them constitute State aid incompatible with the common market, and had sent a letter of formal notice giving Germany two months to provide information. Following much bargaining with German officials, the European Commission showed itself to be favourable, beginning May, to a prorogation of the system, as long as it was "necessary and justified" (see EUROPE of 9 May, p.8).
German should, next week, present a formal proposal concerning the changes that it is envisaging for the present system, otherwise it leaves itself open to the opening of a formal procedure. A Commission spokesperson stated that until today the competent services had still not received a proposal from Germany. He did not comment on the authorisation or not for a ten-year transition period, though in his opinion such a long period would ever be authorised to allow a State aid system to align with European legislation.