IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: 21 Jun 2013 | Removal date: open ended
Still in force

Loan guarantee

On 22 May 2013, Germany notified the EC about its intention to increase the guarantee ceiling from EUR 7 billion to EUR 10 billion for HSH Nordbank.
 
The beneficiary of the measure is the 5th largest German 'Landesbank' created in 2003 via merger of the regional banks 'Hamburgische Landesbank' and 'Landesbank Schleswig Holstein'. Its core business region is Northern Germany and its main focus is on shipping, corporate banking, real estate, renewable energies and infrastrucuture projects (para. 9, letter from the EC to Germany, Brussels, 25 June 2013).
 

The German authorities already granted loss guarantees to the bank in 2009 and 2011 as well as a recapitalisation of EUR 3 billion in 2009 (related measure). The German authorities argued that the 2013 support scheme has already been approved in the 2011 restructuring decision, because a EUR 10 billion guarantee was agreed on and later reduced to EUR 7 billion (para. 30).
 

The European commission does not follow this reasoning and states that 'a cancellation of a guarantee has a binding character, and any re-installment of a previously cancelled tranche of coverage under a guarantee should be considered as a new agreement between the guarantor and the guarantee holder' (para. 41).
 

The EC further stated that: 'HSH's cross-border and international activities, so that any advantage from State resources would affect competition in the banking sector and have an impact on intra-Union trade' (para. 39).
 
Update
On 2 May 2016, the Commission gave the final approval for the guarantee ceiling increase.
 
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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