On October 13, 2008 the EC published a guidance document on Member States' action to support financial institutions in economic distress. (See “Commission Publishes Emergency Guidance on State Aid to Struggling Banks” in our October 2008 Antitrust & Trade Regulation Update.) Article 87(3)(b) of the EC Treaty allows state aid “to remedy a serious disturbance in the economy of a Member State.” The purpose of the guidance document is to ensure that Member States establish coordinated remedies without distorting competition. Aid schemes in line with the guidance document are approved by the EC within very short timeframes.
To date, the EC has approved a number of rescue packages proposed by Member States in support of financial institutions. The approved rescues were adopted in Greece, Finland, Italy, Spain, France, Netherland, Sweden, Ireland, the United Kingdom, Denmark and Germany.
In addition, the EC has approved the following ad hoc aid measures: a joint aid measure by France, Belgium and Luxembourg to Dexia; a guarantee mechanism in Belgium to facilitate the financing of Fortis Bank; a recapitalization plan in the Netherlands for the ING Group; aid in the Netherlands to liquidate Roskilde Bank; a package in the United Kingdom in support of Bradford & Bingley; a loan guarantee measure in Germany amounting to €35 billion to support Hypo Real Estate until April 2009, and a measure worth €9 billion in Germany to support the bank.