ANNOUNCEMENT 12 Oct 2012In October 2012, the government of Cyprus announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
Letter from the EC to Cyprus, Brussels 6 November 2012 - SA.35499
Letter from the EC to Cyprus, Brussels 22.01.2013 - SA.35852
Press release 22 january 2013 - First prolongation
Official source 25.7.2013 - Second prolongation
Press release 18 December 2013 - Third prolongation
Press release 25 June 2014 -Fourth prolongation
Press release 14 January 2015 - Fifth prolongation
Press release 13 July 2015 - Sixth prolongation
Press release 11 January 2016 - Seventh prolongation
Press release 28 June 2016 - Eight prolongation
On 12 October 2012, Cyprus notified the EC about its intention to implement a guarantee scheme for Cypriot banks. The Central bank of Cyprus described the objective of the scheme as: 'to enable credit institutions to raise medium-term funding, thereby enhancing the liquidity of the Cyprus economy and reducing interest rates towards levels comparable to those in other euro area economies". (para 5., letter from the EC to Cyprus, Brussels 6.11.2012)
Under the current economic conditions, Cypriot banks have very restricted access to medium and long-term funding on the open market. The Cypriotic state therefore plans to provide state guarantees of EUR 6 billion. (para. 9)
The guarantees are only to be used as 'collateral for securing new loans or the issue of bonds for the purpose of funding'. (para. 11)
In its reply, the EC finds that: 'The provision of guarantees by the State involves State resources '...' In light of the fact that Cypriot banks are active in other Member States and that subsidiaries of banks headquartered in other Member States are active on the Cypriot banking market, the Scheme is capable of affecting trade between Member States.'
On 6 December 2012, Cyprus notified a first prolongation of the scheme until 30 June 2013.
The EC confirms that the prolongation is 'in line with the Commission's decisional practice. Cyprus may prolong the guarantee scheme for banks until 30 June 2013. Any further prolongation or extension will require the Commission's approval and will have to be based on a review of the developments in financial markets and the scheme's effectiveness'. (para. 36, letter from the EC to Cyprus, Brussels 22.01.2013)
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.