ANNOUNCED AS TEMPORARYNo
Bailout (capital injection or equity participation)
On 4 July 2017, the European Commission approved the Italian authorities support for the precautionary recapitalisation of the Italian bank Monte dei Paschi di Siena. The state aid has a maximum value of EUR 5.4 billion (USD 6.13 billion). The cash injection is granted in return for shares.
In this context, the European Commission concluded that the state aid:"gives an advantage to the Bank as no private investor showed interest in investing a comparable amount and at terms similar to the State's. Also taking into account the market circumstances and the investment risk, a prudent private market operator would not have made a similar investment."
However, the Commission finally concluded that: "... the measures fulfil the requirements of Article 107(3)(b) TFEU and are compatible with the internal market for reasons of financial stability."
Notably, the Commissioner in charge of competition policy noted that: "... This capital injection could only be approved after junior bondholders and shareholders have contributed to the costs of restructuring, in line with "burden-sharing" requirements under EU state aid rules."
The Italian authorities approved a similar cash injection in 2012, see related state act.
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries.
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