ANNOUNCED AS TEMPORARYNo
Capital injection and equity stakes (including bailouts)
On December 2008 the European Commission approved a capital injection scheme suggested by the French authorities. The decision approved capital injections of up to EUR 21 billion in favor of six banks that play a major role in the French economy, namely BNP Paribas, Société Générale, Crédit Agricole, Crédit Mutuel, Caisse D'Epargne and Banque Populaire.
The object of the capital-injection scheme is to allow a refinancing system for financial institutions in need. The funding entity for the French economy, Société de financement de l'économie francaise (SFEF) generates funds by issuing state-guaranteed securities and refinances financial institutions operating in France.
The Commission gave the following assessment:
"'...' since the beneficiary institutions are active on the highly competitive market of banking operations, the financial advantages resulting from capital injection are likely to distort competition and trade between Member States." (par. 78 of the letter from the European Commission to France - Brussels, 8.12.2008 C(2008) 8278 final corr.)
The Commission has decided that the notified scheme is compatible with the common market under the exemption laid down in Article 87(3)(b) of the EC Treaty. (par. 81-108 of the letter)
On 18 March 2009 the European Commission decided to admit an amendment for the French capital-injection scheme for banks.
A state measure in the GTA database is assessed solely in terms of theextent to which its implementation affects the extent of discriminationagainst foreign commercial interests. On this metric, the state aidproposed here is discriminatory.
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