Brussels, 21/09/2004 (Agence Europe) - On Tuesday in Berlin, Mario Monti met the German Secretary of State for Finance, Caio Koch Weser, Managing Director of the Association of German Private Banks Manfred Weber, and the ministers of the Länder concerned, on the longstanding issue of State aid procedures on seven public sector banks ("Landesbanken"). The various parties presented to the Competition Commissioner the compromise reached on the question of real-estate transfers that the State had approved for the regional public banks between 1991 and 1998.
The rate of interest applied to the amount paid in return by the regional public banks was less than the market rate, and the Commission had still hoped the amount of payment would be revised. On Tuesday, the parties concerned informed Mr Monti that they had identified an acceptable rate of remuneration for the time, as well as payment arrangements for the Länder. The College of Commissioners is now expected to take this agreement on remuneration as a basis for its final decision. Concerning recapitalisation projects currently contemplated by the Länder to the advantage of regional public banks, the Commission will examine compliance of each of them with Community legislation, as soon as it has received all relevant information on them.
We recall that, in 2002, the Commission and the German authorities had already come to an agreement on abolishing the State guarantee regime ("Anstaltslast" and "Gewährträgerhaftung") enjoyed by regional banks but which penalised commercial banks (see EUROPE of 2 March 2002). With this new agreement, the long controversy about the system of guarantees granted to German public banks could come to an end.