10.1.1 The concept of “far-reaching restructuring”

It is worth stressing that “far-reaching restructuring” is not a clearly defined concept. The concept of “far-reaching restructuring” is also difficult to pinpoint in relation to the restructuring objectives. It should be recalled that restructuring is aimed at three objectives: i) restoring long-term viability of the beneficiary bank, ii) burden-sharing, and iii) limiting distortions of competition. Consequently, there are three types of restructuring measures: viability-measures, burden-sharing measures and compensatory measures. Sometimes, “far-reaching restructuring” appears to be used as an overall term for these three types of restructuring measures. And sometimes, the degree of restructuring seems to be related to a specific restructuring objective. For instance, in the decision on Ethias, the Commission considered that “(…), it is obvious that Ethias requires in-depth restructuring to return to long-term viability”.1 Consider also the following recital from the decision on T Bank: “The absence of remuneration triggers the need for in-depth restructuring, both in terms of viability measures and in terms of measures to limit distortion of competition”.2

That “far-reaching restructuring” is difficult to pinpoint also follows from the structure of the Commission decisions. Every Restructuring Decision contains a section in which the compatibility of the State aid is assessed on the basis of the three restructuring objectives. Some decisions also contain a preceding section that specifically addresses the degree of restructuring required. For instance, section 5.2.1 of the Restructuring Decision on Ethias was titled “Degree of restructuring required”. Likewise, the Restructuring Decisions in the cases of the four large Greek banks contain a section titled “Sources of difficulties and consequences on the assessment under the Restructuring Communication”.3 Interestingly, such sections are not found in every decision. In most cases, the Commission’s assessment of the need for far-reaching restructuring forms part of the compatibility-assessment (rather than being a preliminary assessment). In many cases, the need for far-reaching restructuring seems to point at the need for compensatory measures.

Even though “far-reaching restructuring” is not clearly defined by the Commission, the fact remains that the Commission concluded in several cases that far-reaching restructuring was needed. Since this conclusion influenced the Commission’s assessment of the viability, burden-sharing and competition distortions, it is important to analyse the characteristics that were relevant to that conclusion.