3.4.4 Temporary Framework for the real economy

As a response to the financial crisis, the Commission not only created the Crisis Framework, it also adopted the Temporary Framework for the real economy. While the Crisis Framework deals specifically with financial institutions, the Temporary Framework was targeted at the real economy. The purpose of the Temporary Framework was to unblock bank lending and to ensure continued access to finance. The financial crisis not only had an impact on the financial sector; the real economy was also heavily affected. Due to the credit crisis, banks became risk-averse. This created problems for the real economy. Not only weak companies, but also creditworthy companies faced sudden problems in gaining access to finance. Especially SME’s faced such difficulties. Besides short-term effects, the Commission also identified long-term effects: if companies experience problems in their access to finance, then they may postpone or abandon investment projects. This is especially harmful if it concerns investments in sustainable growth or environmental friendly projects.

The Commission identified the need for temporary State aid measures. At the same time, the Commission identified the need for a coordinated action to ensure a level playing field. The Commission therefore adopted the Temporary Framework for the real economy. Just like the Crisis Framework, the Temporary Framework was based on Article 107(3)(b) TFEU. As the name ‘Temporary Framework’ indicates, it is a temporary framework. The original Temporary Framework expired in December 2010. However, it was prolonged until 31 December 2011. This New Temporary Framework expired in December 2011.

Since this PhD-study is about State aid to banks, the Temporary Framework is of no relevance to this PhD-study. Accordingly, the Temporary Framework will not be discussed further.