10.3 Far-reaching restructuring needed? (I): amount of aid

Some Restructuring Decisions contain a section entitled “Amount of aid”. This section is (usually) placed after the assessment of the existence of aid and before the compatibility-assessment. As a general rule, a high aid amount will result in the conclusion that far-reaching restructuring is needed.1 Usually, the aid amount is mentioned in relation to the need for compensatory measures (i.e. measures aimed at limiting the competition distortions arising from the State aid). For this reason, the relevance of the aid amount will be discussed in more detail in section 13.2.

Related to the amount of aid is the issue of repeated (rescue) aid. There are some banks that repeatedly received State aid. One of those banks is Alpha Bank, one of the four large Greek banks. In May 2009, this bank received a capital injection under the Greek recapitalisation scheme.2 It also benefited from aid measures under the Greek guarantee scheme and the Greek bond loan scheme.3 In 2012, Alpha Bank received a bridge recapitalisation by the HFSF. In the Opening Decision on Alpha Bank, the Commission noted that the HFSF bridge recapitalisation came after prior recapitalisations and liquidity aid. The Commission concluded that the repeated rescue aid to Alpha Bank could not be considered as genuine rescue aid, and that consequently, the repeated aid should be scrutinised in more depth.4 The Commission went on to observe that “more safeguards should be required, taking inspiration from what is required for restructuring aid”.5

Similarly, in the decision on National Bank of Greece, the Commission considered that “the context of a protracted rescue period blurs the distinction between rescue aid – which is normally temporarily approved without the Commission seeking many commitments from the Member State restraining the beneficiary's actions during the rescue period – and restructuring aid which is approved only after a thorough assessment”.6

The decisions on the Greek banks are special in the sense that they elaborate on the repeated nature of the state interventions. Normally, the amount of aid and the repeated nature are bracketed together – as is illustrated by the following recital:

For this reason, the issue of repeated rescue aid will not be discussed separately, but only in the context of the amount of aid.