ANNOUNCEMENT 20 Jan 2012In January 2012, the government of Spain announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
On 20 January 2012, the Spanish authorities notified the EU about their intention to substantially amend the initial rescue plans for 'Caja de ahorros' (CAM).
CAM is a Spanish savings bank that needed a recapitalization of EUR 2.8 billion in June 2011 (see related measure below).On 7 December 2011, CAM was bought by 'Banco Sabadell' conditional on additional state aid measures (para. 41. and 6, letter from the EC to Spain, Brussels, 30.5.2012).
The EC created a list of risks threatening the solvency of CAM that lead to the second state intervention, namely: significant liquidity constraints, increased assets impairments, low quality of assets, decrease of profitability, low efficiency levels, lack of trust in the future (para. 12).
As a result, the following aid measures were introduced in 2012: (para. 6)
a)Additional recapitalization of EUR 2.45 billion
b)guarantees up to EUR 12.5 billion
c)asset protection scheme covering up to EUR 24.6 billion.
The EC analyzed the newly introduced measures with respect to potential trade distortions. In the case of the recapitalization (a) , the EC concluded "that, the measure is to be financed through State resources, is imputable to the State, is selective in nature, and provides Banco CAM with a clear advantage distorting or threatening to distort competition and affecting trade between Member State". (para. 76)
The same reasoning holds for the guarantees (b) as well as the asset protection scheme (c) (para. 73 & para. 87)
The EC specifies the distortion by stating that "The measure distorts competition as it places the Business after its sale to Banco Sabadell in a beneficial position vis-ŕ-vis other competing banks by strengthening its capital position compared to its competitors, in particular in the Core Regions of Banco CAM '...' the Business is competing with a significant number of subsidiaries and branches of foreign banks in Spain" (para. 83-84).
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