3.6.1 Type of decisions

There are several types of decisions in a State aid procedure. In chronological order, the following types of decisions can be distinguished:

As was explained in section 3.4.1, the Commission used to follow a two-step approach: first the aid was temporarily approved as rescue aid; later followed by an assessment of the restructuring plan. With the introduction of the 2013 Banking Communication, this two-step approach was abandoned for recapitalisation and impaired asset measures. However, most bank State aid decisions were taken before the adoption of the 2013 Banking Communication. Consequently, most bank State aid cases started with a Rescue Decision. In the Rescue Decision, the Commission would assess whether the aid was appropriate, necessary and proportionate. If these three criteria were met, the aid measure was temporarily approved for a period of six months.1

In section 2.5, the State aid procedure was explained. A Rescue Decision corresponds to a ‘decision not to raise objections’ within the meaning of Art. 4(3) of the Procedural Regulation.

In some cases, an Opening Decision is adopted. By this type of decision, the Commission opens the formal investigation procedure laid down in Article 108 (2) TFEU. This procedure is initiated when the Commission has doubts as to the compatibility of the aid. This type of decision is taken on the basis of Art. 4(4) of the Procedural Regulation.

Sometimes, the formal investigation procedure is prolonged; in these cases, a Prolongation Decision is adopted.

In a Restructuring Decision, the Commission assesses the compatibility of the aid measure in light of the restructuring plan. In particular, the Commission assesses whether the three restructuring objectives are met: in the first place, the restructuring plan should ensure the restoration of long-term viability of the bank; in the second place, the restructuring plan should ensure burden- sharing; in the third place, the restructuring plan should mitigate the competition distortions.

It should be noted that sometimes, a restructuring plan provides for the liquidation of the bank.2 In such a case, the restructuring plan is usually called a ‘liquidation plan’. Accordingly, the restructuring decision is referred to as a liquidation decision. The compatibility-assessment of liquidation aid is not really different from the assessment of restructuring aid. Admittedly, the 2013 Banking Communication contains a section that specifically addresses liquidation aid. Nevertheless, point 70 of the 2013 Banking Communication stipulates that the principles for the assessment of restructuring aid apply mutatis mutandis to the assessment of liquidation aid.3 Since a liquidation plan is essentially a restructuring plan, this PhD-study uses the term ‘restructuring plan’ and ‘restructuring decision’.

Depending on whether the Commission has initiated the formal investigation procedure, the Restructuring Decision is taken on the basis of Art. 4 or on the basis of Art. 9 of the Procedural Regulation.4 If the Restructuring Decision directly follows the Rescue Decision, then it corresponds to a ‘decision not to raise objections’ within the meaning of Art. 4(3) of the Procedural Regulation. If, on the other hand, the Restructuring Decision follows an Opening Decision, then it is taken on the basis of Art. 9 of the Procedural Regulation. In this case, the Restructuring Decision is either a ‘positive decision’, a ‘conditional decision’ or a ‘negative decision’.5

In principle, the Restructuring Decision is the final decision. However, in several bank State aid cases, the Commission was requested by the Member State to amend the Restructuring Decision. In the Amendment Decision, the Commission assesses whether the requested amendments are acceptable.

It should be recalled that in the Restructuring Decision, the State aid is declared compatible in light of the commitments (or conditions – in case of a conditional decision). A very common commitment is the commitment to divest certain subsidiaries. Sometimes, the beneficiary bank experiences difficulties when implementing the commitments. For instance, due to deteriorating market circumstances, the bank may find it difficult to divest the subsidiary within the stipulated timeframe. In such a situation, the Member State may request the Commission to amend the Restructuring Decision. An amendment is only possible on the basis of a sufficiently reasoned request from the Member State. Furthermore, the failure to implement the commitment within the stipulated timeframe should be due to external factors. In other words: there should be no fault of the bank.6

Several amendments are possible. In the first place, the Member State can request an extension of the (divestment) deadline. In that regard, the Commission has held that, although it is not explicitly provided for in the Procedural Regulation, the Commission has discretion to allow an extension as long as it does not impede the enforcement of the Restructuring Decision.7

In the second place, the Member State can request a modification of the commitment. To give an example: in case of a divestment commitment, the Member State may propose to change the divestment commitment into a commitment to run-down the subsidiary.8 An important precondition is that the modification does not entail any additional aid. Furthermore, the modification should be based on new commitments which are equivalent to those originally provided.9