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: 18 Feb 2014 | Removal date: 18 Dec 2016
Still in force

Loan guarantee

On 18 Februrary 2014, the European Commission approved the Credit Unions Orderly Liquidation Scheme. The scheme which was used for the first phase of credit union resolutions was valid until the end of June 2014. Since then, it has been repeatedly prolonged and it is still in force (cf. Sources).
 
The beneficiary credit unions are 'member-owned entities, whose business relates to savings, payment services, credits and loans, as well as insurance intermediary services'. Instead of serving the general public, the unions offer 'a membership that is characterised by a common bond. The common bond is based on a pre-existing social connection (such as belonging to a particular community, industrial or geographical group).' (para. 6, letter from the EC to Poland, 18.2.2014)
Furthermore, all credit unions belong to the National Association of Savings and Credit Unions (hereafter: NASCU) which assists and safeguards the financial stability of the unions.
 
As of October 2012, Polish credit unions are required to be supervised by the Financial Supervision Authority (hereafter: FSA). Already FSA's first reports in December 2012 showed substantial losses in 34 registered unions. By December 2013, the FSA had requested special managers in 3 credit unions and demanded recovery plans from further 44 unions.
 
The aid worth EUR 786.6 million (PLN 3.3 billion) will be provided by the Polish authorities to cover credit unions with negative capital and the whole process will be managed by the FSA with potential assistance from the Bank Guarantee Fund (i.e. the Polish deposit guarantee scheme).
 
The Commission also stated that 'given that credit unions are undertakings active in the financial sector, which is open to international competition', it 'considers that any advantage from State resources to credit unions would have the potential to affect intra-Union trade and distort competition'. (para. 52, letter from the EC to Poland, 18.2.2014)
 
Update
On 15 December 2015, the EC approved the fourth prolongation of the scheme until 30 June 2016.
 
Update 2
On 29 June 2016, the EC approved the fifth prolongation of the scheme until 31 December 2016.
 
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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