Brussels, 09 February 2001
Commission and Germany start focused discussions on guarantees to public banks
A delegation led by Mr Caio Koch-Weser, State Secretary at the German Federal Ministry of Finance, and Mr Peer Steinbrück, Minister of Finance of the Land Nordrhein-Westfalen, met today with EU Competition Commissioner Mario Monti to discuss the issue of State aid in the form of guarantees to public banks in Germany. The meeting took place in the context of the process started by the letter of 26 January 2001 (see IP/01/119) by which the Commission informed the German authorities that it considers these guarantees in as far as they affect the competitive position of the banks and trade between Member States to be State aid which is incompatible with Community law. « I welcome the fact that the discussion with Germany on the guarantees has started again after quite some precious time has been lost since we entered into talks last February, » Mr Monti said. « This is a constructive development and I hope that it will provide an impetus for making rapid progress in the context of the procedure launched to bring the guarantee schemes concerned into line with EU rules. »
The Competition Commissioner made it clear that there are three different - and quite separate - issues:
The German delegation today presented a proposal for splitting WestLB, Germany's biggest public bank, into two entities: one which would carry out public service activities and one that would take over the commercial activities. By doing so, the German authorities hope to settle the issue of the guarantees as far as WestLB is concerned.
Mr Monti, in a first brief reaction, called this proposal « a step in the right direction, as regards the guarantees for WestLB and the application of the Transparency Directive to that bank. I hope that it can lead to a solution as far as WestLB is concerned. » However, he also pointed out that it does, at first sight, raise two questions in particular:
The Commissioner also stressed that the proposal does not provide possible solutions for a number of other issues:
« We will now enter into a process of clarification of this particular proposal between my services and the German authorities», Mr Monti said. « But however important the WestLB case is, we have to move forward with the whole issue of 'Anstaltslast' and 'Gewährträgerhaftung'. We must find a simultaneous, overall solution for all cases where there is a distortion of competition as a result of these guarantees. Such a solution could comprise a variety of options to suit the different financial institutions. As long as the minimum requirements necessary to remedy the distortion are met, the Commission is neutral as to any particular model. »