ANNOUNCEMENT 26 Jan 2009

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

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



The official letter from the European Commission to Germany - Brussels, C(2008). Avaliable from < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N38_2009 >

The official letter from the European Commission to Germany - Brussels, 17.12.2010
C(2010)9430 final. Available from : < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_SA_32030 >


Inception date: 26 Jan 2009 | Removal date: 26 Dec 2010
Still in force

State loan

On 26 January 2009, Germany notified the Federal framework for low interest loans. By communication of 11 February 2009, Germany amended its notification.
 
The scheme is expressly based on Article 87(3)(b) ECT, as interpreted by Paragraph 4.4.2 of the Commission communication "Temporary framework for State aid measures to support access to finance in the current financial and economic crisis" (the Temporary Framework).
 
The aid is provided in the form of subsidized public loans to finance investments and working capital. The aid volume resulting from interest rate subsidization under this scheme amounts to EUR 6 billion. The schemes applies to loans that are granted from EU, national, regional, or local resources, as well as to loans granted by public development banks from their own resources. The scheme applies to the whole territory of Germany, and is open to all sectors of the economy. The potential beneficiaries of the scheme are SMEs and large enterprises. The German authorities estimate that the total number of beneficiaries will exceed 1000.
 
The Commission stated that the notified measure constitutes State aid within the meaning of Article 87 (1) of the EC Treaty. The German authorities did not contest that conclusion.
 
The Commission gave the following assessment:
 
" State resources are involved in the notified scheme since the subsidized loans are made available from State resources. The measure is selective since it will be granted only to a limited number of firms located in Germany. The measure confers an advantage by relieving the beneficiaries of costs which they would have to bear under normal market conditions since, without the intervention by the State, the borrowers would obtain loans only at higher costs, if at all. The measure affects trade between Member States since the scheme is not limited to beneficiaries which are active in sectors where no intra-community trade exists." (par. 26-30 of the letter from the EC to Germany - Brussels, C(2008)).
 
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. 31-36 of the letter).
 
Prolongation of the Federal Framework for low interest loans - State aid SA.32030
On 3 December 2010, Germony notified the prolongation of the existing scheme until 31 December 2011. The EC decided not to raise objections.
 
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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