In November 2008, the government of Portugal announced a change in private-sector financial support.



  • 1 harmful
  • 0 neutral
  • 0 liberalising


the letter from the EC to Portugal - Brussels, 20.5.2009 C (2009) 4028 final. Available from < >
the letter from the EC to Portugal - Brussels, 17.03.2010
C (2010) 1733 Final. Available form : < >
the letter from the EC to Portugal - Brussels, 23.7.2010 C(2010) 5128 final. Available from : < >
the letter from the EC to Portugal - Brussels, 21.01.2011 C(2010) 324 final. Available from : < >
the letter from the EC to Portugal - Brussels, 30.6.2011 C(2010) 4715 final. Available from : < >

Inception date: 20 May 2009 | Removal date: 18 Dec 2011

Capital injection and equity stakes (including bailouts)

On 5 November 2008 Portugal notified a scheme to strengthen the financial soundness of credit institutions, whose legal basis is the law n.° 63-A/2008 adopted on 24 November 2008.
The objective of the measure was to strengthen financial stability by recapitalizing credit institutions established in Portugal in order to increase their creditworthiness and to allow the beneficiary to maintain a significant level of financing of the real economy.
The above mentioned Law sets a ceiling of four billion Euros (global budget of the aid scheme). This scheme forms part of the National Initiative to Strengthen Financial Stability, and its global budget is included in the 20 billion Euros dedicated to that general initiative.
All credit institutions with registered office in Portugal can have access to the notified recapitalization scheme independently of their financial soundness.
The Portuguese authorities pointed out that the recapitalization scheme is urgently needed to avert damage to the Portuguese financial market due to the financial market crisis. They acknowledged that the notified scheme is State aid and stressed, however, that the Portuguese government aims to make the scheme as market-oriented as possible. The Portuguese government believed that the aid scheme is compatible with the common market in that it helps to 'remedy a serious disturbance in the economy of a Member State' within the meaning of Article 87(3)(b) of the EC Treaty.
The Commission stated that the Scheme constitutes State aid within the meaning of Article 87(1) of the EC Treaty and gave the following assessment.
"Indeed, the Scheme will enable the beneficiaries to secure capital on more favorable terms than would otherwise be possible in the light of the prevailing conditions in the financial markets. Since it confers an economic advantage on the beneficiaries and strengthens their position vis-ŕ-vis competitors in Portugal and other Member States, the Scheme distorts competition and affects trade between Member States. The advantage is provided through State resources and is selective since it benefits only beneficiaries under the Scheme." (par. 60 of the letter from the EC to Portugal - Brussels, 20.5.2009 C (2009) 4028 final).
The Commission concluded that the notified scheme is compatible with the Common market under Article 87(3)(b) EC, and has accordingly decided not to raise objections against the notified package, since it fulfils the conditions to be considered compatible with the EC Treaty.
Prolongations of the Portuguese Recapitalisation Scheme - State Aid N80/2010, N314/2010, SA.32157 and SA.33177
After the orginal decision, Portugal notified to the Commission four extensions of the Scheme, namely until 31 December 2011.
According to the Bank of Portugal,the Scheme has been extended for a number of reasons:
"First, the Memorandum of Understanding ("MoU") signed between the Portuguese Government on the one hand, and the International Monetary Fund, the European Commission and the European Central Bank on the other hand foresees measures for the banking sector, which include the maintenance and the reinforcement of the recapitalisation scheme. Second, access to market capital by financial institutions in Portugal is currently almost inexistent, with no short-term perspective of improvement. Third, the 'Aviso de Banco de Portugal n° 3/2011' requires credit institutions to reach a consolidated basis Core Tier 1 ratio of 9% by 31 December 2011." (par. 10 of the letter from the EC to Portugal -Brussels, 30.6.2011 C(2010) 4715 final)

On all the cases, the EC decided not to raise objections and considered the Scheme compatible with the internal market.
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.