ANNOUNCEMENT 07 Mar 2012

In March 2012, the government of Germany announced a change in private-sector financial support.

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



letter from the EC to Germany - Brussels, 07.03.2012 C(2012) 1358 fin
http://ec.europa.eu/competition/state_aid/cases/234295/234295_1314960_107_2.pdf

"KfW-Gesetz": "Gesetz vom 5. November 1948 in der Fassung vom 23. Juni 1969 (BGBl. I S. 573)"
updated version from 2006:
"Neunte Zust?ndigkeitsanpassungsverordnung vom 31. Oktober 2006 (BGBl. I S. 2427)"
http://www.kfw.de/kfw/de/I/II/Download_Center/KfW-Gesetz_und_Satzung/KfW_Gesetz_D.pdf

Main Sectors of the SMEs
http://www.kfw.de/kfw/en/KfW_Group/Research/PDF-Files/KfW_Steckbrief_Mittelstand_engli.pdf


Inception date: 07 Mar 2012 | Removal date: 06 Mar 2016
Still in force

State loan

On 11 December 2009, Germany informed the EU Commission about the subsidized loan scheme called "ERP Unternehmenskapital, Kapital für Gründung", that allows for favourable fixed interest rate loans to support the creation of new firms.
 
The loans can be granted to natural persons planning to create or buy enterprises or which have done so up to 3 years prior to applying for funding under the programme.
 
The overall budget is EUR 800 million and will be disbursed over 4 years. Every eligible person can apply for a maximum of EUR 500.000 with a fixed interest rate over 10 years. A minimum of 15% must be financed through own funds (10% for 'Neue Länder', former GDR).
 
The funding is based on the 'KfW-Gesetz' and Germany argues that it did everything to make sure that 'the gross grant equivalent must not be lower than the interest rate of the non-aided bank loan...' (par. 28, letter from the EC to Germany - Brussels, 07.03.2012 C(2012) 1358 fin)
 
The EU Commission observes a potential trade distortion, stating that "the measure confers a selective advantage to certain undertakings" and that "the measure is liable to affect trade between Member states." Hence, "the measure distorts or threatens to distort competition in the internal market". (par. 37,letter from the EC to Germany - Brussels, 07.03.2012 C(2012) 1358 fin))
 
The existence of trade distortion is admitted in the following paragraph: 'When assessing the presence of State aid the Commission has first analyzed SME investment aid, aid for consultancy in favour of SMEs and aid for SME participation in fairs. The measure is granted using funds from the federal German budget, and therefore financed by State resources. The decision to use the State resources for this purpose is imputable to the German State, as KfW as a development bank is part of the State administration for the purpose of State aid assessment. The loans are granted at an interest rate which is below the market rate. The initial beneficiaries arecontractually bound to invest the loan granted into an undertaking. Only undertakings of up to 3 years of existence can benefit from the measure that has a limited budget. Therefore, the measure confers a selective advantage upon these undertakings. The undertakings in question will be active in markets open to competition and subject to intra-Union trade. The measure therefore contains State aid in the sense of Article 107 (1) TFEU.'
 
The EC further concludes that 'as far as the measure foresees subsidized loans for SME investment aid, aid for consultancy in favour of SMEs and aid for SME participation in fairs, the Commission has decided not to raise objections to the notified measure, because the aid can be found compatible with the internal market in accordance with Article 107(3) (c) TFEU, as interpreted by the GBER' (par. 64, letter from the EC to Germany - Brussels, 07.03.2012 C(2012) 1358 fin).

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

 
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AFFECTED PRODUCTS

 
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