ANNOUNCED AS TEMPORARYNo
On 29 October 2008 Finland notified a guarantee against any legal risks of banks and the special purpose vehicle and the depositors participating in the arrangement with Kaupthing Bank h.f, Finnish Branch.
The measure consists of a guarantee against any legal risks of participants in the arrangement with Kaupthing Bank h.f. The state guarantee covers the legal risks in this arrangement, i.e. economic losses suffered from any recovery claim or any other equivalent insolvency claim made against the participating banks, the special purpose vehicle and the depositors.
The Finnish authorities have not set an upper limit of the indemnity, since it was impossible to estimate the amount of possible claims.
The Commission considers that the state commitment to indemnify any legal risks of banks, and depositors participating in the arrangement with Kaupthing constitutes state aid pursuant to Article 87 (1) EC Treaty. It gave the following assessment:
" Firstly, the Measure will be financed from State resources, if the guarantee is ever to be called. Secondly, given that the three Banks and Kaupthing are active in the financial sector, which is open to intense international competition, any advantage from state resources given to them has the potential to affect intra-Community trade and to distort competition."(par 29-30 of the letter from the EC to Finland - Brussels, 21.01.2009 C(2009) 427 final).
The Commission, however,has accordingly decided not to raise objections against the notified measure, since it fulfils the conditions to be considered compatible with the EC Treaty.
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.
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