ANNOUNCEMENT 02 Oct 2009

In October 2009, the government of Sweden announced a change in private-sector financial support.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



(the letter from the EC to Sweden - Brussels, 8.2.2010 C(2010)818 final) - http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N541_2009


Inception date: 01 Nov 2009 | Removal date: open ended
Still in force

Loan guarantee

On 2 October 2009 Sweden notified a State guarantee measure in favour of Saab Automobile AB. Saab is currently 100%-owned by General Motors of Canada Ltd, the latter being wholly owned by General Motors Corporation.
 
A dramatic reduction in demand in the second half of 2008 has led to serious problem for car makers. To provide support for the car sector in the present financial crisis with the objective of preserving an industry with the potential to be competitive, the Swedish government has brought forward a series of measures.
 
As part of this package, the Swedish Parliament had given the Government powers to issue State guarantees to undertakings in the automotive sector, to be used as collateral for loans from the European Investment Bank (EIB) intended to finance a transition to green technologies. Based on the powers it has received from Parliament, on 11 June 2009 the Swedish Government instructed the Swedish National Debt Officeto start negotiations with Saab on the State guarantee (400 million Euros by 2 parts) to be issued for the EIB loan.
 
The Commission concluded that the measure contains state aid and gave the following assessment:
" As regards the application of the State aid criteria of Article 107(1) TFEU to guarantees A and B, the Commission considers the following. As the guarantees are based on powers given by Parliament and can be issued only upon express decision by the Government, the decision to grant the guarantees is clearly imputable to the State. The guarantees are granted from State resources since, in the event the Swedish state would actually have to pay out money under the guarantees, the necessary funds would be drawn from the central State budget, which is consequently burdened by the financial risk linked to the guarantees. The guarantees are also selective since the Government has discretion to choose the undertakings that will benefit from such guarantees. Finally, as there is extensive trade in cars and car parts between several operators within the European Union, the advantage granted to Saab by means of the guarantees would be liable to affect competition and trade between the Member States." (par. 26 of the letter from the EC to Sweden - Brussels, 8.2.2010 C(2010)818 final)
 
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.
 
 
 

AFFECTED SECTORS