3.5.2 The outcome of the Commission’s assessment

In most cases, the aid measures were authorised as compatible State aid. Thus, the conclusion at the first step of the assessment is often that the aid measures constitute State aid within the meaning of Art. 107(1) TFEU. The conclusion at the third step of the assessment is often that the aid measures are appropriate, necessary and proportionate. The conclusion at the fifth step of the assessment is often that the restructuring plan is appropriate to enable the bank to restore its long-term viability, sufficient in respect to burden-sharing and appropriate to limit the competition distortions.

Thus, in most cases, the outcome of the Commission’s assessment is that – in light of the restructuring plan – the aid measures constitute compatible State aid. In a few cases, however, the outcome is different. Since the assessment comprises five stages, the outcome of the assessment can be different in five ways.

In the first place, the outcome of the assessment could be that the aid measures do not constitute State aid within the meaning of Art. 107(1) TFEU. Indeed, there are a few cases in which the Commission concluded that the aid measures did not constitute State aid within the meaning of Art. 107(1) TFEU. This was the case in: Dexia BIL, the Italian securitisation scheme (10 February 2016) and the Hungarian Asset Management Company “MARK” (10 February 2016).

In the second place, the outcome of the assessment could be that the compatibility of the State aid measures should not be assessed on the basis of Article 107(3)(b) TFEU. This outcome would mean that in those cases, the Crisis Framework is not used as the assessment framework. However, as will be explained in section 7.6, in all bank State aid cases, the Commission concluded that Article 107(3)(b) TFEU – and thus the Crisis Framework – formed the basis of the compatibility-assessment.

In the third place, the outcome of the assessment could be that the cumulative criteria of appropriateness, necessity and proportionality are not met. However, it can be observed that the Commission never concluded that the aid was not appropriate, necessary or proportionate. Although there are a few cases in which the Commission concluded that the aid was incompatible, the incompatibility was due to the restructuring plan (i.e. the fifth step of the assessment), rather than due to the nature of the aid (i.e. the third step of the assessment). Indeed, as will be explained in section 8.1.4, the Commission was quite lenient at the third step, while being quite strict at the fifth step of the assessment. For this reason, I am of the opinion that the fifth step of the assessment is more important than the third step.1

In the fourth place, the outcome of the assessment could be that no restructuring plan is required. As will be explained in chapter 10, there are a few instances in which no restructuring plan is required (for instance, when the bank only benefits from a guarantee scheme). However, in most other instances, the Member State has to submit to the Commission a restructuring plan for the beneficiary bank.

In the fifth place, the outcome of the assessment could be that, in light of the restructuring plan, the aid is not compatible. In the cases of Banco Privado Portugues, Banco Tercas and ARCO, the Commission came to the conclusion that the aid was not compatible. In these cases, the Commission adopted a Recovery Decision. Interestingly, these three cases arrived at the Court of Justice. Indeed, as discussed in chapter 5, the beneficiary banks and Member States in these three cases decided to challenge the Recovery Decision.