ANNOUNCED AS TEMPORARYNo
Capital injection and equity stakes (including bailouts)
Austria notified by letter dated 20 May 2009 a prolongation request for its support measures to the banking and insurance industry until 31 December 2009 - N 557/2008 (the Austrian scheme) - State aid N 352/2009.
In response to the exceptional turbulence in world financial markets Austria brought forward a package of measures ("the scheme") designed to restore stability to the financial system and to remedy a serious disturbance in the economy of Austria. These measures are based on two Austrian laws, i) the Interbankmarktstärkungsgesetz (law on enhancing inter-bank markets IBSG) and ii) the Finanzmarktstabilitätsgesetz (law on enhancing stability of the financial market, FinStaG).
The Austrian authorities seek to prolong the existing scheme.
In its original decision the Commission has accepted that the guarantees under the IBSG and the measures provided for in the FinStaG constitute aid within the meaning of Article 87(1) of the EC Treaty in favour of banks and insurance companies and gave the following assessment:
'The guarantees for new liabilities and the recapitalisation measures will enable beneficiaries to acquire the necessary capital and liquidity on more favourable terms than would have been possible under the conditions prevailing in the financial markets. Inasmuch as this will confer an economic advantage on beneficiaries and strengthen their position vis-ŕ-vis their competitors in Austria and in other Member States, the measures at issue will distort competition and affect trade between Member States. The resulting advantage will be a selective one in that it will benefit only beneficiaries under the scheme and will be financed through state resources.' (par. 53 from the letter from the EC to Austria - Brussels, 9 December 2008 C(2008) 8408 final)
Article 87(3)(b) of the EC Treaty enables the Commission to declare aid compatible with the Common Market if it is "to remedy a serious disturbance in the economy of a Member State." This aid has to be applied restrictively and must tackle a disturbance in the entire economy of the Member State according to the interpretation of the Article 87(3)(b) by the Court of First Instance.
The Commission referred to its Communication on the financial crisis and concludes that the Measure complies with the conditions laid therein. Therefore, despite the measure constituting State aid pursuant to the Article 87(1) EC, it is compatible with the Common Market according to the Article 87(3)(b) EC Treaty. The Commission raises no objections against the measure at issue and authorizes it as emergency intervention in the face of the current financial crisis. (par. 60-114 of the letter).
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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