ANNOUNCEMENT 24 Feb 2014In February 2014, the government of Cyprus announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
SA.35334, Letter from the EC to Cyprus, Brussels 24.02.2014
SA.43667, EC press release on the additional aid
On 24 February 2014, the European Commission announced that it had approved a restructuring and recapitalisation scheme for Cypriot cooperative banks. The banks will receive a recapitalisation worth 1.5 billion EUR.
In paragraphs 103 and 104 of the letter to Cyprus, the EC "concludes that the capital injection by the Cypriot Republic entails an advantage to the Cooperative group. The measure has been taken for the sole benefit of the Cooperative group and is, therefore, selective. Given that the Cooperative group is and will be active in the Cypriot retail and SME banking market, where it is in competition with subsidiaries and branches of financial institutions headquartered in other Member States, the advantage from State resources affects trade between the Member States and distort competition".
The measure is planned to be in place until 31 December 2018.
On 18 December 2015, the Commission approved a further 175 million EUR of aid for the recapitalisation of the Cypriot cooperative banks.
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.
The list of affected trading partners is based on Europe's largest financial centres (according to the Global Financial Centres Index).