Brussels, 18/07/2001 (Agence Europe) - After one and a half years of debates and discussions, the European Commission and the German authorities reached an agreement on the subject of guarantees granted to the German public banks. Michael Tscherny, spokesman for Commissioner Monti, announced that the Commission had, on Wednesday morning, received a letter from the German government confirming that it accepts the measures formally requested by the Commission in its communication of 8 May. The day before, Mr Monti had again met the State Secretary for Finance, Caio Koch-Weser, and the members of a delegation including the finance ministers of Rhineland Westphalia, Mr Steinbrück, Falthauser for Bavaria, and Mr Stratthaus for Baden-Wurttemberg, as well as the president of the Association of German Savings Banks, Mr Hoppenstedt. The parties discussed measures that should be taken by Germany in order to abolish the specific guarantees regime currently enjoyed by the 12 regional public banks and the 580 savings banks. They reached an agreement that met with the satisfaction of the European Executive, as Germany unconditionally agreed to abolish this system that penalised business banks to the advantage of its public counterparts. The German government assured the Commission that ad hoc legislation would be adopted by the Federal State and the Länder by the end of the year and would be voted by the different parliaments by the end of 2002. The changes foreseen are as follows: - complete abolition of the "Gewährträgerhaftung" system that commits guarantors (Savings Banks and Länder) to assure the commitments of the Landesbanken towards their creditors if they are unable to do so, on one hand, and the radical "Anstaltslast" change which assures the financial allocation of banks by public authorities in order to adjust it to European law, on the other. Henceforth, the contribution of funds to the Landesbanken as provided for by the "Anstaltslast" should receive prior approval from the Commission.
The compromise will, however, not entail violent change, as the Commission has accepted a transitional four-year period, to take effect from the formal approval by German authorities (18 July 2001) until 18 July 2005, in order to allow the establishments concerned to gradually prepare themselves for the changes planned. The question of the transitional period was, moreover, one of the most controversial points of the dossier, with Germany calling for a period of ten years considered far too long by the Commission.
Concerning the "Gewährträgerhaftung" called on to disappear completely, the agreement provides that the Landesbanken and the savings banks could maintain these guarantees until 2015 for operations carried out until 2005. Thus, the public guarantees dating to before the change in the status of regional establishments may nonetheless be covered. The European Banking Federation, which had triggered of the review process in 1999, has now announced that it was not at all pleased with the agreement, considering that there was no reason to grant such a long time for making changes (see EUROPE of 16 and 17 July, p.10).