ANNOUNCED AS TEMPORARYNo
Bailout (capital injection or equity participation)
On 12 January 2012, Lithuania notified to the European Commission a rescue package for the Lithuanian Central Credit Union (LCCU). The measure was already implemented on 19 December 2011.
LCCU is a credit institution organised on co-operative basis. LCCU unifies 62 small credit unions out of 72 credit unions operating in Lithuania. (par. 4, letter from the EC to Lithuania, Brussels 26.09.2012). Regarding the market share, in terms of assets, LCCU only represents 0.45 per cent or EUR 103 million. LCCU provides a variety of financial services, liquidity and solvency support.
The EC finds that: 'the recapitalisation involves State resources as the measure is financed by the Lithuanian State. The State has subscribed to LTL 6 million (1.7 million EUR) of capital. (par. 34)The EC further states that:'The measure contains a clear advantage to the LCCU, as it allows it to absorb losses on unrecoverable deposits in Snorasbank, hence allowing it to meet the regulatory capital requirements and as such avoid insolvency. In addition, the conditions at which the capital was injected are not in line with what a normal market investor would require.' (par. 36)
The EC therefore concludes that: "the measure is also able to affect trade between Member States and to distort competition as the LCCU facilitates through its members retail and small corporate savings and loans in the Lithuanian banking market, thus potentially affecting subsidiaries of foreign banks." (par. 37)
Based on this statement by the EC, the list of affected countries consists of the list of foreign banks in the country.
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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