ANNOUNCED AS TEMPORARYNo
Capital injection and equity stakes (including bailouts)
On 23 December 2008 the European Commission authorized a recapitalization scheme introduced by Italywith a view to supporting the financing of the economy. The legal basis is article 12 of Decree-Law No 185 of 28 November 2008 and the relating draft implementing decree.
The objective of the measures is to support the flow of finance to the real economy in the current context of financial crisis by strengthening the capital of the Italian banking system. The beneficiaries of the notified measures are Italian banks, i.e. all banks incorporated under Italian law (subsidiaries of foreign banks included), provided that their shares be listed on a regulated market, or holding companies of Italian banking groups, whose shares are listed in regulated markets.
The Italian authorities accepted that the notified measures contain State aid elements. However, they claimed that the scheme is compatible with the common market because it is necessary to remedy a serious disturbance in the Italian economy pursuant to Article 87(3)(b) of the EC Treaty.
The Commission agreed with the position of Italy that the measures constitute aid to the institutions concerned pursuant to Article 87 (1) EC and gave the following evaluation:
"The recapitalisation scheme will enable beneficiaries to secure the necessary capital on more favourable terms than would otherwise be possible in the light of the prevailing conditions in the financial markets. This gives an economic advantage to the beneficiaries and strengthens the position of these beneficiaries compared to that of their competitors in Italy and other Member States and must therefore be regarded as distorting competition and affecting trade between Member States. The advantage is selective since it only benefits the beneficiaries of the scheme and is provided through State resources." (par. 43 of the letter from the EC to Italy - Brussels, 20.02.2009 C(2009) 1288 final).
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 and concludes 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. 45-75 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.
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