14.3.1 Interpreting the findings: has the Commission favoured certain banks?

This PhD-study found several inconsistencies in the decisional practice of the Commission. It is worthwhile to find out if these findings can provide an answer to the question whether the Commission has favoured certain banks. Although this is not the research question of this PhD-study, it nonetheless is an intriguing one.

Chapter 6 already touched upon this question. As set out in that chapter, a bank is treated favourably when the restructuring plan is less far-reaching than it should be (on the basis of the distortive effects of the State aid). In popular terms: a bank is treated favourably when it is ‘punished’ less than it deserves. In that regard, it should be recalled that it is not possible to determine how severe a bank is ‘punished’ by the Commission. In addition, it is not possible to determine how damaging the State aid is. There is thus no easy way of finding out if the Commission has favoured certain banks. For that reason, it is valuable to see if this question can be answered by interpreting the inconsistencies in the Commission decisions found by this PhD-study.

As shown in this PhD-study, there are several decisions in which the Commission did not mention whether the case was characterised by the relevant characteristic. For instance, there are many decisions in which the Commission did not mention whether the senior management of the bank was replaced. This could mean that the relevant characteristic is not present in these cases; in other words: that the senior management was not replaced. The failure to take this into account is favourable to the bank in question. Indeed, as discussed in section 3.5.2, the ‘typical’ outcome of the compatibility-assessment is that the State aid – in light of the restructuring plan – is compatible and thus approved by the Commission. If this outcome is reached irrespective of the restructuring measures, then this is unfavourable to the banks that are confronted with far- reaching restructuring measures.

The next step would be to find out if a certain pattern can be discerned. In other words: are there banks in respect to which the Commission consistently failed to assess whether the case was characterised by certain relevant characteristics? If this would be the case, then these banks would have been treated favourably by the Commission.

However, this approach cannot provide a clear answer to the question whether the Commission has favoured certain banks. In the first place, the analysis of the bank State aid decisions did not reveal a pattern of cases in which the Commission omitted to mention the relevant characteristic.

In the second place, the omission to mention the relevant characteristic does not necessarily mean that the relevant characteristic is not present in the case at hand. Indeed, as explained in section 11.2, the omission to mention the relevant characteristic – such as the replacement of the bank’s senior management – could mean two things: i) the senior management was not replaced;ii) the senior management was replaced, but the Commission failed to take this into account. In situation (i), the Commission favoured the bank, since it did not draw any conclusions from the fact that the senior management of the bank was not replaced. By contrast, in situation (ii), the Commission did not take into account the replacement of the senior management, whilst it normally welcomes such a replacement.

Thus, it cannot be established whether the omission to mention the relevant characteristic was favourable to the bank in question or not. Consequently, even if there were a pattern of cases in which the Commission failed to mention the relevant characteristic, this does not have to mean that these banks were favoured by the Commission.

In the third place, even if the inconsistencies would turn out to be favourable to certain banks, then this does not have to mean that the Commission had the intention to favour these banks. Indeed, the inconsistencies found in this PhD-study can be explained in two ways: either the Commission has been somewhat negligent, or the Commission has deliberately not taken into account the relevant characteristics in certain cases. Deliberately not taking into account relevant characteristics would suggest that the Commission has intentionally favoured certain banks. This implies that there are other factors at play. However, as set out in section 6.7, this PhD-study focusses on the characteristics that are mentioned in the decisions. Relevant characteristics that are not mentioned in the decisions, fall outside the scope of the analysis performed in this PhD-study. This PhD-study does thus not provide an answer to the question whether the inconsistencies are due to negligence or to intention.

For these three reasons, it cannot be ascertained – on the basis of the analysis conducted in this PhD-study – whether the Commission has favoured certain banks. However, it cannot be excluded either. Indeed, as long as there are inconsistencies in the decisional practice, it cannot be excluded that the Commission has favoured certain banks. This finding should have implications for the Commission, as will be discussed below.