The Commission today issued a helpful ‘frequently asked questions’ note, drawing attention to the new package of measures concerning its approach to the approval at State aid for the banking sector adopted in July 2013.
As readers of this blog well know, the banking sector has been the fulcrum of EU State aid activity in recent years. As the FAQs note, approximately 25% of EU banks (more than 60 banking institutions) have now been subject to EU State aid decisions by the Commission.
Amongst other things, the FAQs draw attention to two significant changes to the Commission’s approach to State aid to the banking sector that will take effect in respect of notifications submitted on or after 1 August 2013, as a result in particular of the principles set out in the new Banking Communication (see post of 5 September 2013):
(1) A move to reduce the number of cases in which the Commission approves emergency recaps and impaired asset measures. The stated intention is that such measures should only be approved after a restructuring plan has been signed off with the Commission. However, flexibility is retained for the approval of emergency funding in “exceptional” cases.
(2) More rigorous burden sharing requirements, so as to extend the obligation on banks with capital problems to exhaust all shareholder and subordinated debt holder contributions before seeking recourse to public funding.
The FAQs also provide some helpful pointers on a number of related points, including some of the issues arising in connection with the enhanced burden sharing requirements under Member States’ domestic legal systems.
While it would be precipitous, not to say foolish, to suggest that the introduction of the new EU State aid banking sector package means the end of the crisis, it does arguably signal that (at least from the EU State aid perspective) events have entered a new, potentially less frenetic, phase.