Germany: KfW-run Special Programme 2009
On 19 December 2008, Germany notified the KfW-run Special Programme 2009 ("KfW-Sonderprogramm 2009").
The scheme is expressly based on Article 87(3)(b) ECT, as interpreted by Paragraph 4.4.2 of the Commission communication "Temporary framework for State aid measures to support access to finance in the current financial and economic crisis."
The aid will be provided in the form of subsidized public loans. The scheme is administered by the Kreditanstalt für Wiederaufbau on behalf of the German Federal Government. The 100% publicly owned Kreditanstalt für Wiederaufbau is a public development bank and the main loan arm of the German Federal authorities. Under the Sonderprogramme, a loan volume of € 15 billion is authorised. This loan volume amounts to some € 750 million in aid.
Normally, the access of the scheme is limited to firms/groups of linked undertakings with a turnover not exceeding € 500 million. However, in exceptional cases, larger undertakings can be admitted. Therefore, the beneficiaries of the scheme are SMEs and large firms of all sizes alike.
The scheme applies to firms belonging to the professions ("freiberuflich Tätige") and to the commercially active economy ("gewerbliche Wirtschaft") which includes manufacturing ("produzierendes Gewerbe"), handicraft ("Handwerk"), commerce ("Handel"), and other services, provided they are investing in Germany. In addition, the majority of shares have to be in private ownership.
The Commission concluded that the notified measure constitutes State aid within the meaning of Article 87 (1) of the EC Treaty and gave the following assessment:
"State resources are involved in the notified scheme since the subsidized loans are made available by the Kreditanstalt für Wiederaufbau, a public development bank. The measure is selective since it will be granted only to certain firms. In addition, the loan volume available is limited. The measure confers an advantage by relieving the beneficiaries of costs which
they would have to bear under normal market conditions since, without the intervention by the State, the borrowers would obtain loans only at higher costs, if at all. The measure affects trade between Member States since the scheme is not limited to beneficiaries which are active in sectors where no intra-community trade exists." (par. 23-26 of the letter from the EC to Germany - Brussels, 30.12.2008 C(2008)9026 endgültig).
Article 87(3)(b) of the EC Treaty enables the Commission to declare aid compatible with the Common Market if it is "to remedy a serious disturbance in the economy of a Member State." This aid has to be applied restrictively and must tackle a disturbance in the entire economy of the Member State according to the interpretation of the Article 87(3)(b) by the Court of First Instance.
The Commission referred to its Communication on the financial crisis (Temporary Framework) and concluded that the Measure complies with the conditions laid therein. Therefore, despite the measure constituting State aid pursuant to the Article 87(1) EC, it is compatible with the Common Market according to the Article 87(3)(b) EC Treaty. The Commission raises no objections against the measure at issue and authorizes it as emergency intervention in the face of the current financial crisis. (par. 28 -34 of the letter).
A state measure in the GTA database is assessed solely in terms of the extent to which its implementation affects the extent of discrimination against foreign commercial interests. On this metric, the state aid proposed here is discriminatory.
Any Evidence-Based Deliberation:
|Is there anything in the public record to suggest that evidence of the effectiveness of the proposed measure was considered during official deliberations?||Yes|
|Is there any evidence that alternatives to the proposed measure were considered?|
|Is there anything in the public record that suggests that empirical evidence informed the comparison across the alternatives available to government?|
|Was such evidence identified?|
|Is such evidence publicly available?|
|Did the official decision-maker in question provide an explanation as to why a chosen measure was favoured over alternatives?|
|Is there any evidence to suggest that potentially affected trading partners were consulted before the measures were taken?|
|Is there any evidence that safeguards have been put in place to ensure that implementation of the initiative is transparent and non-discriminatory?|
|Did the government state its intention to review the measure within one year of implementation?|
Date of inception: 1 Jan 2009
Duration: 24 months
GTA Evaluation: Red
the letter from the EC to Germany - Brussels, 30.12.2008 C(2008)9026 endgültig. Available from < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=... >