12.1.2 Overlap and interaction

There is some overlap between the second pillar (burden-sharing) and the third pillar (limiting competition distortions) of the Restructuring Communication. This is illustrated nicely by the following recital:

The notion that State aid may not be used to fund anti-competitive behaviour is mentioned in point 23 of the Restructuring Communication. Point 23 elaborates the own contribution-requirement and explains that restructuring aid should be limited to covering costs which are necessary for the restoration of viability. This means that State aid may only be used for the rescue and restructuring of the bank; it may not be used to finance anti-competitive behaviour. The exact same notion can be found in a different place in the Restructuring Communication: points 39-45 indicate that State aid may not be used to the detriment of non- aided competitors. These points therefore introduce measures to limit competition distortions. One of these measure is the acquisition ban. This compensatory measure as well as the overlap between points 23 and 39-45 will be discussed-in-depth in section 13.10.

In the same vein, moral hazard is not only an important issue in the context of burden-sharing; it also appears in the context of limiting competition distortions. The issue of moral hazard is mentioned in the section on the own contribution (see point 22 of the Restructuring Communication) and in the section on the competition distortions (see point 29). Of great importance is the fact that a low degree of burden-sharing can be compensated by a high degree of restructuring. This follows from points 25 (in the context of the own contribution) and 31 (in the context of competition distortions). This means that there is not only an overlap, but there is also some interaction between burden-sharing and compensatory measures.