|
|
The European Commission has opened under EC Treaty state aid rules an in-depth investigation into support measures for German savings bank Sparkasse KölnBonn and has invited Sparkasse KölnBonn to submit a restructuring plan. This is a first step towards finding a viable long-term solution for the bank in close contact with the German authorities. The opening of an investigation is common for state interventions in the banking sector, especially where a measure is disputed to constitute state aid. Such an investigation ensures legal certainty for stakeholders and gives interested third parties the possibility to submit comments on the measures. It does not prejudge the outcome of the procedure.
Competition Commissioner Neelie Kroes said: “Should the Commission find that the measures constitute state aid, we will have to ensure that they are accompanied by a realistic restructuring plan to address the problems that led to the current situation, without giving the bank an unfair advantage over its competitors."
Sparkasse KölnBonn is a German savings bank. Its Träger (responsible public institution) 'Zweckverband Sparkasse KölnBonn' is a public body 70 per cent owned by the city of
At this stage the Commission considers that, whilst the remuneration on both instruments might have been in line with the interest paid on comparable instruments until the beginning of 2008, the market for hybrid instruments had completely dried up by the end of 2008/beginning of 2009. The Commission therefore has doubts that a market investor would have engaged in such an investment at the time. Under EU state aid rules, interventions by public authorities in companies carrying out economic activities can be considered free of aid if they are undertaken on terms that a private entity operating under market conditions would have accepted.
The Commission's in-depth investigation needs to determine whether the above-mentioned measures constitute state aid. If it finds that they do, the Commission will need to evaluate how the long-term viability of Sparkasse KölnBonn can be ensured. To this end the Commission has invited Sparkasse KölnBonn to submit a restructuring plan.