13.13.3 Implications for the Member States and beneficiary banks

In future bank State aid cases, what can Member States and beneficiary banks expect from the Commission when submitting the restructuring plan? How to anticipate the Commission’s assessment of the compensatory measures?

Intuitively, the relative aid amount is one of the most important factors determining the extent to which compensatory measures are needed. This chapter has shown that the aid intensity is indeed a highly relevant characteristic. However, there are various compensatory measures and one cannot determine, on the sole basis of the aid amount, which compensatory measures are needed. In addition, there is no one-to-one relation between the relative aid amount and the extent of downsizing.

To some extent, the compensatory measures are related to the competitive impact of the aid. Nevertheless, some compensatory measures are always required by the Commission, irrespective of the precise competitive impact. The prime example is the acquisition ban. This compensatory measure is always required in cases in the C-context.

Importantly, Member States have flexibility in deciding how they want to rescue and restructure the bank: by winding-down the bank (W-context), by breaking- up the bank (S-context), by transferring the bank to another bank (T-context) or by allowing the bank to continue as a standalone entity (C-context). It should be noted that the Commission does not impose one of the contexts.

To some extent, the compensatory measures are ‘communicating vessels’. The more structural remedies, the less the need for behavioural restrictions. For instance, the price leadership ban in the case of KBC did not apply to the Belgian market, because KBC had committed to divest Centea and Fidea. In addition, the Commission takes into account the degree of burden-sharing.

As a result, Member States and beneficiary banks have some flexibility in choosing which compensatory measures they want to include in the restructuring plan. For instance, as set out in section 13.4, market-opening measures are not always required by the Commission.