State aid to banks (IVOR nr. 109) 2018/3.5.1:3.5.1 The steps in the Commission’s assessment

State aid to banks (IVOR nr. 109) 2018/3.5.1

3.5.1 The steps in the Commission’s assessment

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It is worthwhile to unravel the various steps in the Commission’s assessment of State aid measures. Although the Commission does not label the steps, as I see it, there are five steps:

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In the first place, it has to be assessed whether a certain aid measure constitutes State aid within the meaning of Article 107(1) TFEU.

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In the second place – when the measure constitutes State aid – it has to be assessed whether the compatibility of the State aid measure should be assessed on the basis of Article 107(3)(b) TFEU (and thus on the basis of the Crisis Framework).

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In the third place – when Article 107(3)(b) TFEU forms the basis of the compatibility-assessment – it has to be assessed whether the State aid meets the cumulative criteria of appropriateness, necessity and proportionality. NB: in the specific case of an asset relief measure, the measure has to comply with the criteria of the Impaired Assets Communication.

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In the fourth place – when the State aid is appropriate, necessary and proportionate – it has to be assessed whether a restructuring plan is required for the beneficiary bank.

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In the fifth place – when a restructuring plan is required – it has to be assessed whether the restructuring plan achieves long-term viability, burden-sharing and the limitation of competition distortions.

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