State Aid control
Commission letter to Member States SG(89) D/4328 of 5 April 1989
The Commission has the honour to inform you of its decision to
examine in future State guarantees under the following conditions.
It regards all guarantees given by the State directly or given
by the State's delegation through financial institutions as falling
within the scope of Article 92(1) of the EEC Treaty.
Each case of the granting of State guarantees has to be notified
under Article 93(3) of the EEC Treaty whether the granting is
done in application of an existing general guarantee scheme or
in application of a specific measure.
The Commission will accept the guarantees only if their mobilization
is contractually linked to specific conditions which may go as
far as the compulsory declaration of bankruptcy of the benefiting
undertaking or any similar procedure. These conditions will have
to be agreed at the initial, and only, examination by the Commission
of the proposed guarantee/State aid within the normal procedures
of Articles 93(3), at the granting stage.
Should the occasion arise that a Member State wants to mobilize
the guarantee under different conditions than those initially
agreed at the granting stage, the Commission will then consider
the mobilization of the guarantee as creating a new aid which
has to be notified under Article 93(3) of the EEC Treaty.
From the point of view of controlling the effect of guarantees
on competition and intraCommunity trade, the Commission believes
that the above decision will enable it to be in a position where
it can prevent large amounts of State aid with possibly high intensity
being granted to certain undertakings at the mobilization level