ANNOUNCED AS TEMPORARYNo
Bailout (capital injection or equity participation)
In December 2008 the Special Financial Market Stabilisation Fund (Sonderfonds Finanzmarktstabilisierung - "SoFFin") provided Commerzbank AG ("Commerzbank"), under Articles 6 and 7 of the Act of 17 October 2008 setting up a Special Financial Market Stabilization Fund, with a recapitalization worth EUR 8.2 billion and a guarantee framework for securities worth up to EUR 15 billion ("SoFFin I"). The measure was adopted as part of the German rescue package for financial institutions which the Commission declared compatible with the common market by decision of 12 December 2008.
In January 2009 SoFFin and Commerzbank entered into negotiations over a further recapitalisation measure ("SoFFin II").
Commerzbank is a credit institution established in the form of a limited company with its headquarters in Frankfurt am Main. It has a group balance-sheet total of approximately EUR 625 billion (position as at 31 December 2008). In 2008 it employed 43 169 people worldwide.
The Commission and Germany agreed that the implemented and planned measures are aid measures within the meaning of Article 87(1) of the EC Treaty. "They constitute a benefit granted to the bank from public resources and have the potential to distort competition and to affect trade between Member States. This assessment has been subject of the Commission's decision on the compatibility with the Common Market of the German rescue package." (par. 79 of the letter from the EC to Germany - Brussels, 7.5.2009 C(2009) 3708 final)
The Commission found that, as a whole, the measures to grant restructuring aid are suited to re-establishing Commerzbank's long-term viability. In addition, measures were being taken to limit the aid to the minimum necessary and to prevent distortions of competition. This restructuring aid is therefore compatible with the common market pursuant to Article 87(3)(b) of 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.
Update: On 21 September 2011, Germany notified the EC that it will update its restructuring plan and not longer seek to divest the Eurohypo AG.
The new plan is to run down the Eurohypo and to split it into a core and non-core business, while the latter will be wound down.
The commission concluded that: " The present modification does not entail any additional State aid to the benefit of Commerzbank. Therefore, it can be considered as a substitution of one commitment (divestiture of Eurohypo) by another (running it down and extension of acquisition ban from 30 April 2012 until 31March 2014). It must be assessed whether that substituted commitment at least equally ensures the compatibility of the restructuring aid provided in 2008 and 2009... The Commission therefore raises no objections to the proposed amendment of the commitments." (page 8, Letter from the EC to Germany, Brussels 30.03.212 C(2012) 2227 fin.)
The trade distortion in the form of "the exclusion from the balance sheet is justified because the bank stopped acquiring new business and therefore, whilst still present on the corresponding markets is not longer competing for new business. The Commission therefore concludes the original commitedment desribed in recital (11) of the 2009 Decision remains."(page 6, Letter from the EC to Germany, Brussels 30.03.212 C(2012) 2227 fin.)
Hence additional trade distortions are excluded but the existing distortions are still valid as long as the state involvement continues.
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