Brussels, 06/12/2006 (Agence Europe) - The Commission announced on Wednesday 6 December that it had reached agreement with the German authorities on the “Sparkasse” case. This agreement rests on “a number of principles concerning the legal protection of the designation 'Sparkasse' in the case of a privatisation”, the Commission said in a press release. It closes the specific infringement procedure launched by the Commission on the grounds that it was incompatible with Community legislation that in Germany a private investor could not use the designation “Sparkasse” (see EUROPE 9221).
Under the terms of the agreement, Community law does not require a privatisation of Sparkassen (savings banks), but does not oppose it either. The privatisation of savings banks is within the sole discretion of Member States. In the case of a privatisation, Member States can require savings banks to continue to meet certain public service obligations. Section 40 of the German Banking Act (Kreditwesengesetz) will be applied in a manner that does not infringe the provisions of EC Treaty on the right of establishment and the movement of payments and capital.
In February 2004, the Commission authorised German authorities to provide financial support (€9.7 billion) to the Bankgesellschaft Berlin AG (BGB) which was in difficulty (see EUROPE 8649). Germany and the Land of Berlin, which, at the time, held roughly 80% of the bank's shares, undertook to carry out a number of transfers, the privatisation of the Berliner Sparkasse being scheduled for the start of 2007. The Commission decision acknowledges that some public service obligations, such as the provision of banking services for less well-off people and to small and medium-sized enterprises SMEs), are compatible with European legislation.
Under the agreement, Community law, which is higher ranking and directly applicable - particularly the previously mentioned decision on state aid - supersedes the protection of the designation “Sparkasse” as was provided for under Article 40 of the German Banking Act. However, this law should not be amended. Even in private hands, the Berliner Sparkasse can continue to use that name, on condition that it fulfils the public service obligations and conforms to the territoriality principle, which means that it cannot operate outside the geographic zone of its members. What does this case mean for procedures involving other German savings banks? The Commission will consider each on a case-by-case basis, said the spokesman for Internal Market Commissioner Charlie McCreevy. (mb)