Press Release: State aid: Commission gives guidance to Member States on measures for banks in crisis

The European Commission published guidance on how Member States can best support financial institutions in the current financial crisis whilst respecting EU state aid rules and so avoiding excessive distortions of competition. The guidance was based in particular on EC Treaty rules allowing for aid to remedy a serious disturbance in the economy of a Member State (Article 87.3.b of the EC Treaty). The guidance will help Member States to put in place coordinated concrete measures to restore confidence in financial markets in accordance with the 12th October Eurogroup declaration. EU state aid rules require that measures taken do not give rise to disproportionate distortions of competition, for example by discriminating against financial institutions based in other Member States and/or allowing beneficiary banks to unfairly attract new additional business solely as a result of the government support. Other requirements include that measures must be limited in time and foresee adequate contributions from the private sector. The Commission will aim to approve schemes that comply with this guidance very quickly (within 24 hours, if possible).