ANNOUNCEMENT 21 May 2009

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

NUMBER OF INTERVENTIONS

1

  • 1 harmful
  • 0 neutral
  • 0 liberalising

SOURCE



Official letter from the EC to Greece - Brussels, 03.06.2009 C(2009)4438. Available from < http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=3_N309_2009 >


Inception date: 01 Jun 2009 | Removal date: 30 Dec 2010
Still in force

State loan

On 21 May 2009, the Greek authorities notified the Temporary aid scheme for granting aid in the form of loans with subsidized interest rates -State aid N 309/2009.
 
Greece stated that the financial crisis is affecting its whole economy at local, regional and country level. The Greek authorities considered that the macroeconomic situation is remaining negative in the near future. The Commission 2009 spring forecast is forecasting Greek GDP to shrink by 0.9 % in 2009. The unemployment rate stands at 9.4 % (January 2009). The unemployment level of 465 700 in January is an increase of 1.4% over the previous year.
 
The Greek authorities foresee a set of national measures aimed at remedying a serious disturbance in the economy of Greece. The assessed measure is part of this set of measures that contains also an aid measure in form of limited amounts of compatible aid and an aid measure in form of guarantees.
 
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 aid will be provided in the form of subsidized public loans. The scheme applies to the whole territory of the Greece and is open to all sectors of the economy. The potential beneficiaries of the scheme are SMEs and large enterprises (not more than 500).
 
The Commission stated that the notified measure constitutes state aid within the meaning of Article 87 (1) of the EC Treaty and 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 Greece. 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 favouring of certain undertakings means that competition is distorted or threatened to be distorted. 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. 25-28 of the official letter from the EC to Greece - Brussels, 03.06.2009 C(2009)4438)
 
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 (Temporary Framework) and concluded 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. 30-36 of the letter).
 
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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