Kroes start onderzoek naar Oostenrijks bankconcern (en)

The European Commission has opened a formal investigation under EC Treaty state aid rules into a €900 million guarantee granted in 2006 to BAWAG-PSK by an Austrian law, the BAWAG P.S.K Sicherungsgesetz . The Commission needs more information to assess whether the guarantee is in line with the aid EC rules for supporting firms in difficulties. The opening of an in-depth investigation, which is common for guarantees of this magnitude, gives interested parties an opportunity to comment on the proposed measures. It does not prejudge the outcome of the procedure.

Competition Commissioner Neelie Kroes i said: "Companies in difficulty may benefit from state support under strict conditions. It is the Commission's duty to verify that these conditions are met, in order to ensure that competition is not distorted and that the restructuring of BAWAG-PSK is likely to be a success."

Following speculative financial investments during the period 1995 to 2004, BAWAG lost money and was not able to close its 2005 balance sheet. Alerted by the press, depositors withdrew large amounts of money from saving accounts in spring 2006. To avoid a severe liquidity crisis, the Austrian Parliament adopted the BAWAG P.S.K Sicherungsgesetz, a law providing for a financial guarantee worth €900 million to BAWAG-PSK.

After an initial submission of a restructuring plan by Austria, the Commission needs to assess further whether the conditions set out by the guidelines on state aid for rescuing and restructuring firms in difficulty are all fulfilled.

The opening of a formal investigation procedure before the adoption of a Commission decision on whether the aid is compatible with the state aid rules will help to ensure legal security for the aid beneficiary and for the Austrian authorities.