Press Release: State aid: Commission requests Austria to recover around €55 million from buyer of Bank Burgenland

The European Commission decided under EC state aid rules that Austria must recover some €55 million from Austrian insurance group Grazer Wechselseitige (GRAWE) following an in-depth investigation into the privatisation of Bank Burgenland. The investigation, opened in December 2006 (see IP/06/1849), found that the Austrian regional government of Land Burgenland had not behaved like a private market seller when it sold Bank Burgenland to the second highest bidder, GRAWE, disregarding a substantially higher offer from an Austro-Ukrainian consortium. The Commission decision confirmed that a public vendor needs to clearly distinguish its role as a seller of an asset on an open market, and its role as a public authority who had granted state aid in the form of a guarantee to Bank Burgenland. A private seller would not have taken existing guarantee liabilities into consideration but would have taken the highest bid. By not doing so, Land Burgenland provided an undue competitive advantage to GRAWE that constitutes incompatible state aid. To remedy the distortion of competition and eliminate the aid, Austria must therefore recover the advantage from GRAWE, on the basis of the difference between the price offered by the Austro-Ukrainian consortium and the price paid by GRAWE, i.e. around € 55 million.

European Commission: MEMO/08/282: State aid: Commission requests Austria to recover around €55 million from the buyer of Bank Burgenland http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/08/282&format=HTML&aged=0&language=EN&guiLanguage=en

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