IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

Yes

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: 30 May 2012 | Removal date: 30 Apr 2018
Still in force

Capital injection and equity stakes (including bailouts)

On 12 December 2011, Portugal notified to the European Commission a new recapitalisation scheme for credit institutions in Portugal. A previous scheme has been in place until 31 December 2011 (related measure).
 
The new scheme is aimed at strengthening the financial stability in Portugal, 'in order to increase their creditworthiness, and to allow beneficiaries continued access to market funding and compliance with solvency requirements.'(par. 4, letter from the EC to Portugal, Brussels 30.5.2012).
 
The new recapitalization is executed via special shares acquired by the state or hybrid securities to increase the core tier 1 capital of relevant banks. Specific criteria for remuneration (both types) are laid down in paragraph 8-16. The budget of the scheme is EUR 12 billion. (par. 20)
 
The EC finds that: 'the recapitalisation by the State allows the Beneficiaries to secure capital on more favorable terms than would otherwise be possible in the light of the prevailing conditions in the financial markets, as is recognised by the BdP. It thereby gives an economic advantage to the Beneficiaries. (par. 26)
The EC therefore concludes that: 'It strengthens their position compared to that of their competitors in Portugal and other Member States. It must, therefore, be regarded as distorting competition and affecting trade between Member States.' (par. 26)The measure entered into force on 1 January 2012 and will expire after 12 month.


Update: Prolongation SA.35747 & SA.36869 & 37698 & SA.38900 & SA.39991 & SA.42404 & SA.43996 & SA.45761 & SA.47168 & SA.48550
Numerous prolongations extended the measure by 6 month each. With its 16th prolongment, the measure is set to expire on 30 April 2018.
 
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.

AFFECTED COUNTRIES

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