State aid: Commission approves creation of Malta Development Bank

On the 24 August 2016, the European Commission found Malta’s plans for setting up the Malta Development Bank (“MDB”) to be in line with European Union’s state aid rules. The MDB will provide funding to small and medium sized companies that face difficulties in financing themselves from the market.

European Union’s state aid rules allow Member States to grant aid to National Promotional Banks, if they provide financing in areas where market failures lead to an undersupply of finance by private operators, or where the private market would not provide such financing on its own. On this basis, the Commission had concluded that the MDB's scope of activity will not distort competition in the Single Market.