ANNOUNCEMENT 08 Feb 2009In February 2009, the government of Sweden announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
the letter from the EC to Sweden - Brussels, 10.2.2009 C(2009) 1011 final. Available from < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N69_2009 >
the letter from the EC to Sweden - Brussels, 05.08.2009 C (2009) 6228 final. Available from : < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N436_2009 >
On 8 February 2009 Sweden notified the below measures as state aid. Sweden has notified a scheme allowing the state to inject capital into financial institutions.
The financial institutions eligible for recapitalization under the Scheme are the same as for the Guarantee scheme, i.e. banks and mortgage institutions incorporated and operating in Sweden (including Swedish subsidiaries of foreign institutions), provided they meet minimum capital adequacy under Swedish law.
The maximum amount of capital the Swedish Government intends to make available under the Scheme is SEK 50 billion (approximately EUR 4.8 billion).
The Commission founds that the notified measure constitutes state aid within the meaning of Article 87 (1) of the EC Treaty and gave the following assessment:
" Indeed, the Scheme will enable the beneficiaries to secure capital on more favourable terms than would otherwise be possible in the light of the prevailing conditions in the financial markets. Since it confers an economic advantage on the beneficiaries and strengthens their position vis-ŕ-vis competitors in Sweden and other Member States, the Scheme distorts competition and affects trade between Member States. The advantage is provided through state resources and is selective since it benefits only beneficiaries under the Scheme." (par. 25 of the letter from the EC to Sweden - Brussels, 10.2.2009 C(2009) 1011 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. 28-47 of the letter).
Prolongation and amendment of the Swedish recapitalisation scheme - State Aid N 436/2009
On 6 July 2009, Sweden notified a request to prolong and amend its recapitalisation scheme (see above).With regard to the prolongation, Sweden has additionally made the following express commitments:
1) In relation to each bank recapitalised under the scheme a viability plan will be submitted within six months of the capital injection in order to enable the Commission to review the bank's risk profile and viability so that the Commission can assess whether it still can be considered fundamentally sound or whether it requires some restructuring.
2) In the case that bank applies for a second recapitalisation, the Commission will be informed as early as possible, so that it can assess whether the bank can be considered fundamentally sound or whether it requires restructuring.
The requested prolongation period is for 6 months counting from 18 August 2009. The scheme is valid until 17 February 2010. Sweden seeks approval of a prolongation of the Scheme given that the unfavourable market conditions still persist.
The Commission has decided not to raise any objections to the prolongation of the Scheme.
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.