ANNOUNCED AS TEMPORARYNo
Capital injection and equity stakes (including bailouts)
On 29 May 2009, the Irish Government announced its intention to provide up to EUR 4 billion of capital to Anglo Irish Bank Corporation Limited under the Irish Government's bank recapitalization programme - State aid N356/2009.
Anglo Irish Bank is one of the six core banks in Ireland. It has a balance sheet size of almost EUR90 billion (nearly 50% of Irish GDP) and accounts for a significant share of customer deposits and lending in the Irish economy. The Bank lends to a wide range of customers, providing funds for investment and employment in such areas as retail, office, leisure, health care, tourism and other services. It is also a significant lender to the construction and development sector, which forms a very important part of its balance sheet.
The Measure at issue is a EUR 4 billion capital injection into Anglo in the form of ordinary shares.
The Commission came to the conclusion that the measure provides a selective advantage to Anglo and that it constitutes State aid in the sense of Article 87(1) EC and gave the following assessment:
" Given that Anglo Irish Bank is active in the financial sector, which is open to intense international competition, any advantage from State resources to Anglo would have the potential to affect intra-Community trade and to distort competition. Since the Irish Government injects EUR 4 billion to the Bank, it is also clear that the measure is imputable to the Irish State and that State resources are involved. It must also be examined whether the measure leads to a selective advantage to Anglo Irish for it to constitute a State aid. The State capital injection gives an economic advantage to the Bank. The advantage is selective since it only benefits the Bank. " (par. 46-47 of the letter from the EC to Ireland - Brussels, 26.6.2009 C(2009) 5185 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 (Temporary Framework) and concluded 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. 50-75of the letter).
Second, Third and Fourth Recapitalisation of Anglo Irish Bank and Restructuring of Anglo Irish Bank - State aid NN12/2010, C11/2010 (ex N667/2009), NN 35/2010 (ex N 279/2010) and SA.32057 (2010/NN)
On 30 November 2009, the Irish authorities notified a restructuring plan prepared by the Bank (registered under State aid case N 667/2009).
On 17 February 2010, the Irish authorities formally notified their intention to inject additional capital of a maximum of EUR 10.44 billon into Anglo-Irish Bank. This second recapitalisation was approved by the Commission on 31 March 2010.3 By the same decision, the Commission initiated a formal investigation procedure on the restructuring plan and the associated recapitalisations by the State.
On 31 May 2010 the Irish authorities submitted an amended restructuring plan for Anglo Irish Bank.
On 9 June 2010 the Irish authorities informed the Commission services of their intention to provide a third capital injection to Anglo-Irish Bank of EUR 10.054 billion. The Commission approved that recapitalisation on 10 August 2010.
On 26 October 2010 the Irish authorities notified a revised plan for restructuring Anglo-Irish Bank.
On 8 December 2010, the Irish authorities notified the fourth recapitalisation of EUR 4.946 billion and guarantees in respect of certain liabilities in favour of Anglo to the Commission.
The Commission has decided to temporarily approve the recapitalisation and the guarantee measure as emergency aid in view of the serious threat to financial stability until it has reached a final decision on Anglo's 'resolution' plan and the associated aid measures.
The original assessment of the Commission considering that the aid schemes constitute State aidin the sense of Article 107(3)(b) TFEU (ex Article 87(3)(b) EC Treaty)and are temporarily compatible with the internal market for reasons of financial stability did not change. In the same way, the Commission still considers that these measures have the potential to affect intra-Union trade and to distort competition. (cf. par. 40, 45, 73-78 of the letter from the EC to Ireland - Brussels, 21.12.2010 C(2010) 9503 final.)
Joint restructuring plan for Anglo Irish Bank and Irish Nationwide Building Society- State aid SA.32504
On 31 January 2011, Ireland notified the Commission of a joint restructuring and work-out plan for Anglo Irish Bank and INBS.
The joint restructuring plan foresees the merger of Anglo and INBS,after the sales of their respective deposit books, into one singleentity which will be licensed, fully regulated and 100% State owned. Thejoint opening balance sheet after the merger will amount to EUR '60-70'billion.
The objective of the proposed joint restructuring plan is to avoid the risk of further losses fromnew lending, manage the work-out of the loan books efficiently and keep State aid requirements to a minimum.
In the base case, the joint restructuring plan assumes that no additional capital beyond
that effectively injected to date, namely EUR 34.7billion (EUR 29.3illion for Anglo and EUR 5.4billion for INBS) will be required. In astress scenario, capital requirements would increase up to EUR 38billion, meaning that an additional EUR 3.3billion of capital '...' overthe period of the plan (namely ten years).
The EC concluded that measures taken related to the restructuring planare able to distort competition and affect trade between Member States.(par. 100-102 of the letter from the EC to Ireland - Brussels,29.06.2011 C(2011)4432 final.)
The EC also concluded that the related measures are considered to berestructuring aid that those measure are compatible with the internalmarket under Article 107(3)(b) TFEU. (par. 191 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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