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State aid: Commission opens in-depth investigation into Portugal's state guarantee for Banco Privado Português

Commission Européenne - IP/09/1691   10/11/2009

Autres langues disponibles: FR DE PT

IP/09/1691

Brussels, 10 November 2009

State aid: Commission opens in-depth investigation into Portugal's state guarantee for Banco Privado Português

The European Commission has opened, under EC Treaty state aid rules, an in-depth investigation into the state guarantee on a €450 million loan granted to Banco Privado Português by six Portuguese banks. The Commission initially approved the measure on 13 March 2009 (see IP/09/400 ) for a period of six months, subject to the submission of a restructuring plan outlining the future of the bank without state aid. Such a plan has not yet been submitted to the Commission. On 5 June 2009 Portugal prolonged the guarantee for a further six months without prior notification to the Commission. The Commission has doubts that the state guarantee is still in line with its Guidance Communication on state aid to overcome the financial crisis (see IP/08/1495 ) in relation to both the duration and the pricing of the measure. 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 stakeholders and provides an opportunity to third parties to submit comments.

Competition Commissioner Neelie Kroes said: "The Commission has to assess whether the state guarantee for Banco Privado Portugues adequately addresses the bank's situation without unduly distorting competition, as well as check whether the plan that the Commission has invited Portugal to submit will be sufficient to deal with the situation of the bank without requiring additional state resources."

Banco Privado Português (BPP) is a financial institution providing private banking, corporate advisor and private equity services. In response to acute difficulties threatening its survival, on 5 December 2008 Portugal granted a state guarantee that was approved for six months by the Commission on 13 March 2009. This decision required Portugal to submit a restructuring or liquidation plan for BPP as a condition for accepting a guarantee fee below the level that would have applied pursuant to the Banking Communication. Portugal has not yet presented the requested plan and has prolonged the guarantee without notifying it to the Commission.

The Commission has also sent Portugal an injunction to provide restructuring or liquidation plan for BPP, setting out the measures the Portuguese Government intends to take for the future of the bank, in compliance with EU state aid rules.

The non-confidential version of the decision will be made available under the case number NN 57/2009 in the State Aid Register 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 .


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