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: 09 Feb 2012 | Removal date: open ended
Still in force

Capital injection and equity stakes (including bailouts)

On 25 October 2012, Spain notified a restructuring plan for Liberbank. The plan foresees capital injections as well as the transfer of impaired assets.
 
Liberbank is a Spanish commercial bank and the result of 'the integration between three savings banks', namely: Caja de Ahorros de Asturias, Caja de Ahorros y Monte de Piedad de Extremadura and Caja de Ahorros de Santander y Cantabria (par. 7, letter from the EC to Spain, Brussels 20.12.2012)
 
The stress test for European banks on 28 September 2012, revealed capital shortfalls of Liberbank amounting for EUR 1.198 billion. (par. 10)
 
Liberbank received multiple support measures by the Spanish government program FROB ('Fondo de Reestructuración Ordenada Bancaria') between 2009 and 2012:

  • Guarantees amounting for EUR 3.875 billion, approved on 9 February 2012
  • Recapitalisation of EUR 124 million in the form of convertible contingent bonds by the FROB approved on 20 December 2012
  • Transfer of impaired assets to a bad bank called AMC, on 20 December 2012

 
The EC finds that: '...the FROB, the intervening authority providing the measures, is directly financed through State resources and that its decisions are directly imputable to the State.' (par. 63)
 
The EC concludes that: ' the measures potentially distort competition as they allow Liberbank to strengthen its capital position and to de-risk its activities' (par. 72)The EC therefore considers that: ' the measures are likely to affect trade between Member States because Liberbank continues to compete on the Spanish retail market, the mortgage lending markets and the commercial lending markets' (par. 73)
 
The EC also names potential affected countries by stating that: 'In all those markets, some Liberbanks's competitors are subsidiaries and branches of foreign banks. (par. 73)
 
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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