ANNOUNCED AS TEMPORARYNo
Capital injection and equity stakes (including bailouts)
On 1 July 2009 Slovakia notified a recapitalization and guarantee scheme for financial institutions. On 19 June 2009 the Slovak Parliament approved the "Act on measures to mitigate the effects of the global financial crisis on the banking sector, and on amendments to certain laws."
The beneficiaries of the aid are systemically relevant banks incorporated in Slovakia (including subsidiaries of foreign financial institutions). Aid is provided in the form of capital contributions and guarantees. The recapitalization scheme is limited to EUR 332 million per year (total of EUR 664 million for the period 2009 - 2010). The aid in the form of guarantees is limited to a maximum yearly amount of 10% of the expenditures in the State budget of the Slovak Republic. The total amount of aid for the period 2009 - 2010 is EUR 2.8 billion.
The Commission concluded that the measure contains state aid and gave the following assessment:
"The recapitalisations and the guarantees to the credit institutions allow the beneficiaries to secure the required capital as well as liquidity on more advantageous conditions than would otherwise be possible in the light of the prevailing conditions in the financial markets. This gives an economic advantage to the beneficiaries and strengthens their position compared to that of their competitors in Slovakia and other Member States and must therefore be regarded as distorting competition and affecting trade between Member States. The advantage is selective since it only benefits the beneficiaries of the scheme and is provided through State resources." (par. 47 of the letter from the European Commission to Slovakia - Brussels, 08.12.2009 C (2009) 9889 final).
Article 107(3)(b) TFEU 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 107 (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 107 (1) TFEU, it is compatible with the internal market according to the Article 107 (3)(b) TFEU. 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. 48 - 79 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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