Sélecteur de langues
Brussels, 1st October 2008
Competition Commissioner Neelie Kroes said: “An in-depth investigation provides a good opportunity for discussing the plan submitted in August in greater detail and finding a solution to ensure the long-term viability of West-LB. I am confident that, with the full commitment of all parties concerned, a sustainable solution can be found."
WestLB AG is a European commercial bank based in North Rhine-Westphalia, Germany's largest federal state. With total assets of €285.3 billion as at 31 December 2006, it is a major German financial services provider. As one of the seven independent German Landesbanken, it acts as a central bank for savings banks in NRW and Brandenburg, and as an internationally operating commercial bank it acts as their link to global financial markets.
On 8 February 2008, the State of North Rhine-Westphalia set up a risk shield for WestLB to protect it against the volatility of its €23 billion structured investment portfolio, because of difficulties arising from the subprime crisis in financial markets. The Commission concluded on 30 April 2008 that the risk shield constitutes state aid, but that the aid was in line with the EU rules on rescue aid because strict conditions ensure that the aid is limited in time and reversible (see IP/08/665).
In line with the Commission's decision on the rescue aid, Germany notified on 8 August 2008 a restructuring plan for WestLB, including a prolongation of the risk shield. This notification temporarily extends the legality of the risk shield until the Commission has finalised its assessment of the restructuring plan. The detailed investigation will evaluate whether the envisaged restructuring is capable of restoring the long-term viability of the bank, whether state support is limited to the minimum necessary, and whether compensatory measures should be put in place to minimise potential distortions of competition created by the aid.
The opening of a formal investigation procedure does not prejudge whether the measures concerned are in line with the EU state aid rules. It is a necessary step to ensure legal certainty for the aid beneficiaries and their business partners and provides an opportunity to improve the state aid measures.
The Commission is currently dealing with a number of state aid cases resulting from the US sub-prime crisis. It has notably opened a detailed investigation in the restructuring cases concerning IKB (see IP/08/314 and MEMO/08/124), Northern Rock (see IP/08/489 and MEMO/08/202) and has already approved restructuring aid for the German Landesbank SachsenLB (see IP/08/849 and MEMO/08/363) and rescue aid for the Danish bank Roskilde (see IP/08/1222 and MEMO/08/532).
The non-confidential version of the decisions will be made available under the case number C43/2008 on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.