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European State Aid Policy in Relation to Financial Institutions and the Financial Crisis

Ivarsson, Aleksander LU (2010) JURM01 20101
Department of Law
Abstract (Swedish)
Stabiliteten på finansmarknaden har visat sig vara en viktig fråga för Kommissionen och en integrerad del av EU: s konkurrenspolitik. Den globala finanskrisen, med ursprung i USA, har påverkat de flesta av EU:s medlemsstater och framförallt skadat banker. Ett minskat förtroende för de finansiella marknaderna ledde till att utlåningen mellan banker totalt uteblev. Detta ledde i sin tur till en kreditåtstramning av aldrig tidigare skådat slag. Som en reaktion på de ekonomiska svårigheterna som de finansiella institutionerna upplevde började medlemstater genomföra olika statliga stödåtgärder för att öka stabiliteten på de finansiella marknaderna.

Statligt stöd är dock generellt förbjudet inom EU i enlighet med... (More)
Stabiliteten på finansmarknaden har visat sig vara en viktig fråga för Kommissionen och en integrerad del av EU: s konkurrenspolitik. Den globala finanskrisen, med ursprung i USA, har påverkat de flesta av EU:s medlemsstater och framförallt skadat banker. Ett minskat förtroende för de finansiella marknaderna ledde till att utlåningen mellan banker totalt uteblev. Detta ledde i sin tur till en kreditåtstramning av aldrig tidigare skådat slag. Som en reaktion på de ekonomiska svårigheterna som de finansiella institutionerna upplevde började medlemstater genomföra olika statliga stödåtgärder för att öka stabiliteten på de finansiella marknaderna.

Statligt stöd är dock generellt förbjudet inom EU i enlighet med artikel 107 (1) EUF. I artikeln förbjuds statliga stöd och det fastställs att statliga stöd är oförenliga med den gemensamma marknaden. Icke desto mindre är detta förbud inte absolut eller ovillkorligt och Kommissionen har befogenhet att bevilja undantag enligt artikel 107 (2) och 107 (3) EUF. Finansiella institut beviljades statligt stöd av artikel 107 (3)(b) EUF efter att Kommissionen kom fastställt att de statliga stöd som beviljats av medlemsstaterna ansågs vara förenliga med den inre marknaden. Stödåtgärderna ansågs vara utformade för att avhjälpa de allvarliga störningar i medlemstaternas ekonomier som den globala finansiella krisen hade skapat.

Kommissionen har spelat en aktiv roll i den ekonomiska återhämtningen inom den europeiska unionen. Genom att kommunicera riktlinjer och ett tillfälligt regelverk för statligt stöd, har Kommissionen lyckats att skapa en ökad rättssäkerhet och därigenom förebygga negativa effekter av statligt stöd som annars skulle ha påverkat hela den europeiska ekonomin. Den roll som Kommissionen har haft inom detta område undersöks i denna examensuppsats. Historiskt har Kommissionen alltid krävt begränsningar av statliga stöd till företag och finansiella institutioner i ekonomiska svårigheter. Kommissionen policy har sannolikt stabiliserat den finansiella marknaden och dess tillvägagångssätt har mer eller mindre legat i linje med deras tidigare policy. Den höga graden av samordning som Kommissionen i och med sin policy i beslut om statligt stöd har skapat och den tillsyn de haft har troligen varit avgörande för att återställa livskraften på de finansiella marknaderna. Kommissionen har därmed aktivt förhindrat stödkapplöpning mellan medlemstater.

Å andra sidan kan frågan ställas huruvida statligt stöd är en lämplig åtgärd för att hantera och reglera den finansiella sektorn. Den bakomliggande orsaken till att statliga stöd är förbjudna och att det finns en kontroll av statligt stöd är att statliga ingripanden anses vara snedvridande av sund konkurrens. Det är ostridigt att statliga ingripanden skapar marknadsmisslyckanden och s.k. moralisk riske. Det kortsiktiga målet att återskapa den finansiella stabiliteten har varit viktigare än det långsiktiga målet om sund konkurrens på Europas finansiella marknader (Less)
Abstract
The stability of the financial market has proven to be an important issue for the European Commission and an integral part of European competition policy. The global financial crisis, originating from the U.S., has affected most of the European Union’s Member States. A loss of confidence in the financial markets led to a freeze in interbank lending and an unprecedented credit crunch. As a response to the financial difficulties that the financial institutions experienced, Member States started to implement various State aid measures to increase the stability of the financial markets.

State aid is however generally prohibited within the European Union pursuant to Article 107(1) TFEU. The article generally prohibits State aid and lays... (More)
The stability of the financial market has proven to be an important issue for the European Commission and an integral part of European competition policy. The global financial crisis, originating from the U.S., has affected most of the European Union’s Member States. A loss of confidence in the financial markets led to a freeze in interbank lending and an unprecedented credit crunch. As a response to the financial difficulties that the financial institutions experienced, Member States started to implement various State aid measures to increase the stability of the financial markets.

State aid is however generally prohibited within the European Union pursuant to Article 107(1) TFEU. The article generally prohibits State aid and lays down the incompatibility with the common market. Nonetheless, this prohibition is not absolute or unconditional and the Commission has the power to grant exemptions under Article 107(2) and 107(3) TFEU. Financial institutions have been granted State aid on the basis of Article 107(3)(b) when the Commission came to the conclusion that State aid granted from Member States was considered to be compatible with the internal market. The aid measures were believed to remedy the serious disturbance in the economies that the financial crisis had created.

The Commission has played an active role in the financial recovery of the European Union. By communicating guidelines and a temporary framework for State aid, the Commission has managed to provide legal certainty and thus preventing negative effects from State aid to affect the entire European economy. The role of the Commission in this field is examined in this thesis. Historically the Commission has always called for limitations of aid to financial institutions in difficulties. The State aid policy advocated from the Commission has probably stabilized the financial market and the policy has more or less been in line with their previous policies. The high level of coordination from the Commission in state aid decisions and enforcement has probably been crucial for the return to viability of the financial markets and has effectively prevented Member States to engage in subsidy races.

On the other hand, it could be argued whether State aid is an appropriate policy instrument for tackling and regulating the financial sector. The underlying reason for the State aid control is that governmental intervention is held to be distortive of healthy competition. It is undisputed that governmental intervention could create market failures and moral hazard.
The short-term goal of financial stability has been more important than the long-term goal of healthy competitive European markets (Less)
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author
Ivarsson, Aleksander LU
supervisor
organization
course
JURM01 20101
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
EG-rätt
language
English
id
1628015
date added to LUP
2010-07-13 11:17:30
date last changed
2010-07-13 11:17:30
@misc{1628015,
  abstract     = {The stability of the financial market has proven to be an important issue for the European Commission and an integral part of European competition policy. The global financial crisis, originating from the U.S., has affected most of the European Union’s Member States. A loss of confidence in the financial markets led to a freeze in interbank lending and an unprecedented credit crunch. As a response to the financial difficulties that the financial institutions experienced, Member States started to implement various State aid measures to increase the stability of the financial markets.

State aid is however generally prohibited within the European Union pursuant to Article 107(1) TFEU.  The article generally prohibits State aid and lays down the incompatibility with the common market.  Nonetheless, this prohibition is not absolute or unconditional and the Commission has the power to grant exemptions under Article 107(2) and 107(3) TFEU. Financial institutions have been granted State aid on the basis of Article 107(3)(b) when the Commission came to the conclusion that State aid granted from Member States was considered to be compatible with the internal market. The aid measures were believed to remedy the serious disturbance in the economies that the financial crisis had created.

The Commission has played an active role in the financial recovery of the European Union. By communicating guidelines and a temporary framework for State aid, the Commission has managed to provide legal certainty and thus preventing negative effects from State aid to affect the entire European economy. The role of the Commission in this field is examined in this thesis. Historically the Commission has always called for limitations of aid to financial institutions in difficulties. The State aid policy advocated from the Commission has probably stabilized the financial market and the policy has more or less been in line with their previous policies. The high level of coordination from the Commission in state aid decisions and enforcement has probably been crucial for the return to viability of the financial markets and has effectively prevented Member States to engage in subsidy races. 

On the other hand, it could be argued whether State aid is an appropriate policy instrument for tackling and regulating the financial sector. The underlying reason for the State aid control is that governmental intervention is held to be distortive of healthy competition. It is undisputed that governmental intervention could create market failures and moral hazard.
The short-term goal of financial stability has been more important than the long-term goal of healthy competitive European markets},
  author       = {Ivarsson, Aleksander},
  keyword      = {EG-rätt},
  language     = {eng},
  note         = {Student Paper},
  title        = {European State Aid Policy in Relation to Financial Institutions and the Financial Crisis},
  year         = {2010},
}