Press Release: Commission informs Germany of its position regarding guarantees

On 26.1.01, the European Commission sent a letter to the German authorities stating that it considers the guarantees in favour of the country's public law credit institutions, in as far as they affect the competitive position of the institutions and trade between Member States, to be State aid which is incompatible with Community law. The German Government is invited to submit its observations on the Commission's position within one month. The letter is the first step in the normal procedure for bringing existing aid schemes into line with EU rules. It should be remembered that the Commission not only spelled out its general position as to State aid in the form of guarantees in November 1999 but that it has also received, more than a year ago, a formal complaint directed specifically against 'Anstaltslast' and 'Gewährträgerhaftung', the two guarantee instruments traditionally used in the German public banking sector. The letter was sent by the Directorate General for Competition on the instruction of the European Commissioner for Compeition, Mario Monti.

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