ANNOUNCEMENT 23 Jan 2009In January 2009, the government of Denmark announced a change in private-sector financial support.
NUMBER OF INTERVENTIONS
The official letter from the EC to Denmark - Brussels, 3.2.2009 C(2009) 776 final. Avaliable from < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N31a_2009 >
The official letter from the EC to Denmark - Brussels, 17.08.2009 C(2009)6441final. Available from: < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N415_2009 >
The official letter from the EC to Denmark - Brussels, 1.2.2010 C(2010)601 final. Available from: < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N20_2010 >
On 23 January 2009 Denmark notified a recapitalization scheme for credit institutions in Denmark and amendments of the guarantee scheme for banks in Denmark ('existing guarantee scheme').
According to the Danish authorities, the aim of the recapitalization scheme is to stimulate the supply of credit to viable and healthy undertakings and households by increasing the capital and the solvency of credit institutions in Denmark and thus enhancing their possibility to offer finance to the real economy.
The recapitalization scheme is open to all solvent credit institutions, i.e. banks and mortgage credit institutions fulfilling the solvency requirements fixed by the Danish Financial Supervisory Authority. Subsidiaries of foreign banks in Denmark are included in the scheme, as they exist in Denmark as independent legal persons.
The Danish authorities acknowledged that the notified measures contain State Aid elements. However, the Danish authorities took the view that the notified measures do not involve any undue distortions of competition or any harmful side effects for other Member States.
The Commission agreed with the position of Denmark that the notified measures constitute aid to the institutions concerned pursuant to Article 87 (1) EC. However, the Commission gave the following assessment:
"The notified package of measures will enable the beneficiaries to secure the necessary capital and liquidity on more favorable terms than would otherwise be possible in the light of the prevailing conditions in the financial markets. Since this confers an economic advantage on beneficiaries and strengthens their position vis-ŕ-vis their competitors in Denmark and in other Member States, these measures distort competition and affect trade between Member States. The advantage is selective since it benefits only beneficiaries under the scheme and is provided through state resources." (par. 54 of the letter from the EC to Denmark - Brussels, 3.2.2009 C(2009) 776 final).
Article 87(3)(b) of the EC Treaty enables the Commission to declare aid compatible with the Common Market if it is "to remedy a serious disturbance in the economy of a Member State." This aid has to be applied restrictively and must tackle a disturbance in the entire economy of the Member State according to the interpretation of the Article 87(3)(b) by the Court of First Instance.
The Commission referred to its Communication on the financial crisis and concludes that the Measure complies with the conditions laid therein. Therefore, despite the measure constituting State aid pursuant to the Article 87(1) EC, it is compatible with the Common Market according to the Article 87(3)(b) EC Treaty. The Commission raises no objections against the measure at issue and authorizes it as emergency intervention in the face of the current financial crisis. (par. 56-85 of the letter).
Prolongations of Danish guarantee scheme on new debt - State AidN415/2009 and N 20/2010
On 10 July 2009 Denmark notified a request to prolong the measure, which was approved by Commission decision of 17 August 2009 in State aid case N415/20092.
On 15 January 2010 the Danish authorities notified a second request for prolongation of the original scheme until 30 June 2010, which was approved by Commission decision of 1 February 2010 in State aid case N 20/2010.
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.