A Portuguese bank (BPP) has been ordered to repay illegal aid comprising of a State guarantee on a €450m loan. The loan guarantee was temporarily approved by the European Commission in 2009, as emergency support on condition that Portugal submitted a plan to restructure the Bank within 6 months of the approval. After several reminders, when no restructuring plans were produced, the Commission formally took a decision that the aid was illegal because the conditions for approval had been breached. The Commission has ordered that the difference between the guarantee fee paid by BPP and the market rate for the guarantee will have to be repaid. In any event, attempts to save the bank proved fruitless. In April 2010, BPP had its banking licence revoked and it is now in liquidation.
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Collapsed bank ordered to repay aid after failure to produce restructuring plan
- Nabarro LLP
- Cyrus Mehta, Brian Sher and Rachel Bickler
- European Union, Portugal
- August 9 2010
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