The European Commission has opened under EC Treaty State aid rules an in-depth investigation into state support measures for German bank Hypo Real Estate. This is a first step towards finding a viable long-term solution, in close contact with the German authorities. Hypo Real Estate Holding AG (HRE) obtained rescue aid in the form of a state guarantee of €35 billion, endorsed by the Commission on 2 October 2008. Because this measure continues to be necessary for the bank to ensure its financing, Germany has notified a prolongation of the guarantee together with accompanying measures for HRE. This notification temporarily extends the legality of the €35 billion state guarantee until the Commission has finalised its assessment. The detailed investigation will evaluate whether the planned measures are capable of restoring the long-term viability of the bank, whether state support is limited to the minimum necessary, and whether measures should be put in place to minimise potential distortions of competition created by the aid. The investigation will also cover the acquisition of 20 million newly-issued HRE shares by SoFFin on 30 March 2009 and the prolongation of the €52 billion guarantees granted under the German banking rescue scheme. It might possibly include an additional capital injection by SoFFin. The opening of an investigation is common for state interventions of this magnitude and will ensure legal certainty for the companies concerned. It also gives interested parties the possibility to submit their comments. It does not prejudge the outcome of the procedure.
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Commission opens in-depth investigation into aid package for German bank Hypo Real Estate
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