Brussels, 01/03/2002 (Agence Europe) - A new stage has been crossed in the modification process to the system of guarantees granted to German public banks, with the official adoption of an agreement that opens the path to the entry into force of a new system. On 28 February, the Commissioner for competition, Mario Monti met German Minister of State for Finance, Caio Koch-Weser, accompanied, for the occasion, by the Finance Ministers of Rheinland-Westphalia, Peer Steinbruck, Bavaria, Kurt Faltlhauser, Baden-Wuttemberg, Gerhard Stratthaus, and the President of the German Savings Banks Association, Dietrich Hoppenstedt. Together, they reached conclusions, after a year and a half of intense discussions, the major outlines of which they had already sketched out on 17 July, concerning the abolition of State guarantees granted to German public banks ("Anstaltstat" and "Gewahrtragerhaftung"), which, in their current form, do not comply with European legislation regarding State aid (see EUROPE of 19 July) Mr. Koch-Weser said that all the necessary legislative provisions would be adopted at both federal and regional level by end-2002. The German authorities will already notify the Commission of the final version of the texts that will allow the agreement to take effect and, partially submit this for adoption by the parliaments of the Laender, also by the end of the year. On the Commission's side, Mr. Monti will ask the College to adopt the new decision by the end of March, decision that will amend the one taken on 8 May 2001 in which the Commission formally asked Germany to agree to alter the incriminated system. The decision will fix in detail the measures that Germany must take, in agreement with the Commission, regarding public guarantees, measures for which correct implementation will be closely monitored.
The conclusions provide for the adoption of a "standard platform", that is the replacement of the "Anstalstat" and abolition of the "Gewahrtragerhaftung". As a reminder, the Anstaslstat" may be translated as "obligation of maintenance": the public authorities holders of an establishment (Federal State, Laender of municipality) have the responsibility to assure its economic bases and sound operations for the whole period of its existence. The 'Gewahrtragerhaftung", for its part, provides for "an obligation to guarantee": the responsibility of the guarantor (savings bank and Laender) is assumed for all engagements that the banks assets cannot cover. Concerning the Anstalstat, the conclusions establish several provisions aimed at replacing the system. According to these provisions: a) the owner of the Landesbank will not be compelled to sink funds in the Landsbank and the latter will therefore not owe anything to its owner; b) the Landesbank meets its commitments on all its assets; c) the responsibility of the owner of the Landesbank is limited to its statutory capital. The owner of the bank is not, moreover, responsible for the bank's commitments; d) all the Landesbanken must be declared bankrupt (Ed.: Hitherto, a federal legislation clause allowed the German public banks to escape bankruptcy, thus facilitating their access to credit, which gave them a considerable and discriminatory competitive advantage over the private banks). The public banks are therefore now subject to the same rules of insolvency as the private banks, and their creditors are thus placed in the same situation as the creditors of private banks. The "Gewährträgerhaftung" is purely and simply abolished. Thus, the changes foreseen will allow financial relations between the public owner and the public credit bank not to differ from a normal commercial relationship of ownership governed by market economy principles, after the fashion of the relationship that exists between a private shareholder and a limited company, states the Commission. It adds that the owner of a public establishment will always have the possibility of granting it economic support as long as it abides by the European rules governing State aid. The provisions concerned provide for a transitional period to allow the German system to adjust without placing the balance of the current system at risk. Thus, commitments existing on 18 July 2001, the date when German authorities accepted the Commission's recommendation of the month of May, will continue to be covered by the "Gewährträgerhaftung" until they expire. Furthermore, a transitional period until 18 July 2005 is foreseen, during which the Anstaltslast and the Gewährträgerhaftung may be maintained in their current form. At the end of this transitional period, any commitment existing at that date and contracted after 18 July 2001 will continue to be covered by the "Gewährträgerhaftung", on condition that it expires by 31 December 2015 at the latest. Announcing the agreement concluded, Michael Tscherny, spokesman for Commissioner Monti, stressed that the stage crossed on 28 February was a "true breakthrough". "We are convinced that the German authorities will do everything possible to keep to the timetable", he added.