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The Commission approved the German rescue package intended to stabilise financial markets by providing capital and guarantees to eligible financial institutions.
The rescue package consists of a recapitalisation scheme, a guarantee scheme covering new issuances of short and medium term debt, in return for market-oriented remuneration, and a temporary acquisition of assets.
The adequacy of the recapitalisation is ensured by strict conditions such as a dividend ban and several behavioural commitments including limiting beneficiaries' future activities and capping managers' remunerations. The Commission also ensured that the state will receive proper remuneration for the preference shares it receives in exchange for a capital injection.
The conditions of the guarantee scheme are in line with the state aid rules. The Commission considers the pricing of the guarantee to be adequate especially since specific behavioural conditions apply, limiting expansion and advertising of the state support.
The criteria for the temporary acquisition of assets are aligned on the rules of the guarantee scheme. In particular the state will take over the assets but not bear their risk, as the assets need to be bought back after 36 months maximum for essentially the initial sales price. Moreover, a minimum premium similar to that of the guarantee and the costs for the provision of liquidity must be paid by the beneficiary.
The Commission found the scheme and the commitments to constitute an appropriate means to restore confidence in the creditworthiness of German financial institutions and to stimulate interbank lending. It considered that the measures are well-designed and that interventions will be limited to what is necessary to achieve the recovery of the
Finally,