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: 28 Jul 2010 | Removal date: open ended
Still in force

Bailout (capital injection or equity participation)

On 26 March 2010, Spain informed the EC about the involvement of the Spanish government program FROB ('Fondo de Reestructuración Ordenada Bancaria') in the merger of three saving banks, namely: Caixa Cataluny, Caixa Tarragona and Caixa Manresa, creating the Catalunya Caixa group. The new bank represents EUR 81 billion in assets.
 
On 28 July 2010, FROB purchases EUR 1.25 billion of convertible preference shares in Catalunya Caixa. On 18 February 2011, Spain introduced a reinforced solvency framework. As a result, Catalunya Caixa required additional capital of EUR 1.71 billion.
 
On 28 July 2011, Catalunya Caixa transferred its financial business to the newly created banking entity 'Catalunya Banc S.A. ' (par. 7, letter from the EC to Spain, Brussels 30.9.2011)
 
On 23 September 2011 Spain notified a capital injection of EUR 1.71 to comply with the new solvency framework. Catalunya Banc was not able to 'to raise funds in financial markets or through another private solution' (par. 8).
 
The EC observes that: 'the intervening authority, the FROB, is directly financed through State resources. (par. 32) The EC further states that: 'the measure distorts competition as it allows Catalunya Banc (and Catalunya Caixa which runs the banking activity through Catalunya Banc) to obtain the capital necessary to avoid technical insolvency and its exit from the market. (par. 35)
 
The EC therefore concludes that: 'the measure is also likely to affect trade between Member States because Catalunya Banc competes on the Spanish retail market, the mortgage lending markets and the commercial lending markets.'(par. 36)
The EC also names potential affected countries by stating that: 'in all those markets, some of Catalunya Banc's competitors are subsidiaries and branches of foreign banks. ' (par. 36)
 
Update: Restructuring plan - SA.33735
On 31 March 2012, Spain notified the restructuring plan for Catalunya Caixa. The final version was notified on 20 November 2012. The restructuring plan foresees an additional recapitalisation of EUR 9.08 billion through the purchase of ordinary shares by FROB. Furthermore, the bank will benefit from transferring impaired assets to bad bank called AMC. The volume of assets transferred amounts to EUR 5-10 billion. (par. 51)
 
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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