BRUSSELS (MNI) – The European Commission on Wednesday extended a
deal that allows EU member states to financially support their banks
during the financial crisis.
The prolongation of the 2008 deal – which allows normally
anti-competitive state support to be given to banks – comes with a new
requirement for banks to present a restructuring plan containing details
of how they will wean themselves off the state handouts.
“As of 1st January 2011, every bank requiring state support in the
form of capital or impaired asset measures will have to submit a
restructuring plan,” the Commission said in a statement.
It said a “gradual phasing out of the support will encourage the
restructuring of banks and of firms with structural difficulties
creating the conditions for a normalisation of the credit conditions and
a firming of the recovery process.”
“After almost two years of a specific crisis state aid regime, we
need to prepare a gradual return to normal market functioning,” European
Commissioner for Competition, Joaquin Almunia, said in a press release.
“Of course, the remaining risk of renewed stress is a valid reason
to proceed with care and caution in the exit process,” the Commissioner
added.
The Commission said the European economy is at “a crucial juncture”
and that while the economic recovery is “taking hold,” the situation in
financial markets “remains fragile.”
–Brussels: 0032 487 (0) 32 803 665, echarlton@marketnews.com
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