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European Commission - Press release

State aid: Commission opens investigation into aid granted to Austrian bank ÖVAG

Brussels, 9 December 2011 - The European Commission has opened under EU state aid rules an in-depth investigation into several support measures that Austria had granted to Österreichische Volksbank (ÖVAG) in 2009. ÖVAG had presented a restructuring plan in autumn 2010, but it became clear in recent months that the bank is unable to implement it. The Commission had doubts that the plan would enable the bank to become viable and that it sufficiently addressed the distortion of competition brought about by the state support. The opening of an investigation does not prejudge the outcome of the procedure.

Commission Vice President in charge of competition policy Joaquín Almunia said: "I expect that the Austrian authorities submit as soon as possible a revised restructuring plan that clearly demonstrates how ÖVAG can become viable without continued state support and that credibly addresses competition distortions and burden sharing."

In 2009, Austria granted a €1 billion capital injection and a guarantee covering a €3 billion liquidity facility to ÖVAG on the basis of the Austrian bank rescue scheme, approved by the Commission in December 2008 (see IP/08/1933).

A restructuring plan, which foresaw the divestiture of the bank's business in Central and Eastern Europe and focused on core activities, was submitted in November 2010. The Commission has doubts that this plan is apt to restore the bank's viability. Moreover, the Commission has concerns that the measures foreseen to limit distortions of competition created by the aid and to ensure a fair sharing of the costs of restructuring between the bank, its shareholders and the State are insufficient. Finally, in the course of 2011 it became increasingly clear that ÖVAG is not able to implement the plan. It also failed the stress test of the European Banking Association (EBA). On the basis of the information currently available, the Commission has serious doubts that the state aid for ÖVAG can be approved under EU State aid rules. A new, further reaching restructuring plan should be presented as soon as possible.

Background

The non-confidential version of the decision will be made available under the case number SA.31883 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.

Contacts :

Amelia Torres (+32 2 295 46 29)

Maria Madrid Pina (+32 2 295 45 30)


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