Sweden: State guarantee in favour of Saab Automobile AB
Description
On 2 October 2009 Sweden notified a State guarantee measure in favour of Saab Automobile AB. Saab is currently 100%-owned by General Motors of Canada Ltd, the latter being wholly owned by General Motors Corporation.
A dramatic reduction in demand in the second half of 2008 has led to serious problem for car makers. To provide support for the car sector in the present financial crisis with the objective of preserving an industry with the potential to be competitive, the Swedish government has brought forward a series of measures.
As part of this package, the Swedish Parliament had given the Government powers to issue State guarantees to undertakings in the automotive sector, to be used as collateral for loans from the European Investment Bank (EIB) intended to finance a transition to green technologies. Based on the powers it has received from Parliament, on 11 June 2009 the Swedish Government instructed the Swedish National Debt Office to start negotiations with Saab on the State guarantee (400 million Euros by 2 parts) to be issued for the EIB loan.
The Commission concluded that the measure contains state aid and gave the following assessment:
" As regards the application of the State aid criteria of Article 107(1) TFEU to guarantees A and B, the Commission considers the following. As the guarantees are based on powers given by Parliament and can be issued only upon express decision by the Government, the decision to grant the guarantees is clearly imputable to the State. The guarantees are granted from State resources since, in the event the Swedish state would actually have to pay out money under the guarantees, the necessary funds would be drawn from the central State budget, which is consequently burdened by the financial risk linked to the guarantees. The guarantees are also selective since the Government has discretion to choose the undertakings that will benefit from such guarantees. Finally, as there is extensive trade in cars and car parts between several operators within the European Union, the advantage granted to Saab by means of the guarantees would be liable to affect competition and trade between the Member States." (par. 26 of the letter from the EC to Sweden - Brussels, 8.2.2010 C(2010)818 final)
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:
| Question | Result |
|---|---|
| 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 Discovered:
Implemented: Yes
Date of inception: 1 Nov 2009
Duration: 170 months
GTA Evaluation: Red
Source:
(the letter from the EC to Sweden - Brussels, 8.2.2010 C(2010)818 final) - http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=...
Government Response:
- 387 reads
