Transcript The economic crisis & DG COMP`s response

State Aid Days
Brno
16-17 April 2009
The economic crisis &
DG COMP’s response
Humbert Drabbe
Director
DG Competition, European Commission
1
Financial crisis - beginnings

August 2007

First cases of banks in difficulty (UK, D,
DK)
2
Financial crisis – crisis precipitated

September 2008

Stability of financial institutions at risk;
credit flows to the wider economy
squeezed

Member States start to put together
general financial sector rescue schemes
3
Our principles in responding

Important to stand firm on principles:
relaxing the rules would help dismantle
the Single Market and hinder recovery

But equally important to be flexible on
process
4
DG COMP – crisis organisation:
Flexibility in process
Teams working round the clock to
approve measures
 Daily meetings to coordinate action
 Involving other DGs (Markt, Enterprise,
EcFin, LS, SecGen)
 Recruitment of financial services
specialists

5
DG COMP principled response:
October-December 2008

13 October – Commission guidance on how
MS can support financial institutions

5 December – Commission guidance on
recapitalisation of banks
–
–
Rescue and restructuring principles – Article
87(3)(b)
Distinguishing between fundamentally sound and
distressed banks
6
End 2008: Crisis affects
the real economy

26 November – Commission Economic
Recovery Plan
–
–
–
“Crisis as an opportunity” - towards a low
carbon economy and clean technologies
1.5% GDP stimulus
Speed up investment in energy efficiency
7
Response to the real economy crisis

17 December – Temporary Framework for
state aid rules

Essential part of Economic Recovery Plan
Objective is to facilitate companies’ access to
credits
30 December – first real economy state aid
measures approved


8
January-February 2009 – no let up
Numerous bank schemes and individual
rescue packages approved
 Commission guidance on impaired
assets
 Amendments to the temporary
framework
 Cars communication builds on
recovery plan and clarifies rules

9
Wider context:
4 March communication
Need for a stronger supervision of the
European financial sector
 Calls on Member States to restore
financial stability, based on impaired
assets paper
 Calls on Member States to expedite the
implementation of their national
recovery plans

10
What will come next

Further banking and real economy
cases approved

First asset relief measures under review

First wave of restructuring cases to
expected soon
11
Conclusions
Level playing field must be maintained
 Discriminatory or protectionist national
measures must be prevented
 This will

–
–
Ensure swifter recovery
Avoid protectionist backlashes in Europe
and around the globe
12