State Aid control
State Aid Scoreboard > Conceptual and methodological remarks (crisis aid)
Different approaches can be applied when measuring the public assistance provided to the financial sector in the context of the continuing financial crisis. DG Competition applies a tailored made approach that is developed specifically to measure the State aid within the meaning of Article 107(1) TFEU granted to financial institutions (see below). Furthermore, Eurostat provides statistics on the public interventions in support of the financial sector but the methodology applied focuses on the impact on the government deficit and debt (see here).
Methodology for calculating crisis-related state aid granted to the financial sector
Contrary to the concept applied to the non-crisis aid, the methodology used to measure the financial crisis aid does not provide information on the actual aid element of the corresponding aid measure.
State aid used (implemented)
This involves the aid actually implemented and given to financial institutions. As regards the guarantees on liabilities and liquidity measures other than guarantee, the figures in the corresponding table offer a picture on the outstanding amounts of aid provided to financial institutions for the period 2008–2012. Data on recapitalisation and impaired assets relief includes nominal amounts.
The figures for all the aid instruments do not represent definitive statistics on the amounts of State aid granted to financial sector. In other words, they do not provide information on the definite cost that the public finances bear as a result of the support provided to financial institutions. For example, in respect to guarantees on liabilities, governments will only bear a cost in case that they are called upon. In the same way, part of recapitalisation provided to the financial institutions has been already repaid but this is not included in State Aid Scoreboard
Further information on the methodology used to record the expenditure under the four major aid instruments is provided below:
Guarantees on liabilities
The overall volume of outstanding guarantees in the reporting year calculated as the average of end-of-quarter (31 March, 30 June, 30 September, 30 December) outstanding amounts; in addition, Member States reported the nominal amount of all newly granted guarantees on liabilities during the reporting year, which have not been rolled over.
Liquidity measures other than guarantees on liabilities
The overall volume of outstanding liquidity measures (other than guarantees) in the reporting year calculated as the average of end-of-quarter (31 March, 30 June, 30 September, 30 December) outstanding amounts; in addition, Member States reported on the new aid granted in order to enable State aid expenditure on liquidity measures to be rounded up.
The overall amount of the recapitalisation for the reporting year. Aid repaid is not taken into account.
The nominal amount implemented in the reporting year calculated as the transfer value of the assets minus their market value, in accordance with the Impaired Assets Communication; Aid repaid is not taken into account.
Only the nominal amount implemented in the reporting year (and in the previous years) is required.
Aid granted to the financial sector is reported in current prices, even for previous years, in order to present familiar information from previous publications of such information, also in respect to past approved budgets. When figures are expressed in relation to GDP, the overall amount of aid in terms of GDP for the entire reference period is calculated on the basis of the GDP corresponding to the reporting year.
Moreover, the information from the Member States' annual reports on aid granted to the financial sector is checked against the information reported for the individual aid measure that Member States provide in accordance with the provisions set out in the decision on the individual case (either ad hoc or scheme cases) and with other available tools such as ECFIN data or Bloomberg data.
For estimates made with respect to financial crisis aid, Commission staff provided estimates for guarantees and liquidity measures when the Member States' authorities were unable to provide data in accordance with the methodology established for those instruments.
Data on financial crisis aid may differ from data for the same year published previously. Member States may have replaced provisional figures or estimates from the previous year(s) by final actual expenditure, in particular with respect to expenditure in the form of guarantees or liquidity measures which are particularly difficult to quantify.
Statistics on public support to financial institutions provided by other Commission's services
Apart from DG Competition, other Commission services also provide publically accessible information on government assistance to financial institutions in the financial crisis context.
Eurostat collects from EU Member States a set of supplementary data, following its decision of 15 July 2009 on the statistical recording of public interventions to support financial institutions and financial markets during the financial crisis. The main differences, compared to financial crisis data reported to DG Competition, are the following:
- Data reported to Eurostat cover all direct government support measures for financial institutions. More general monetary policy operations, economic support measures and support for other sectors of the economy that might also benefit financial institutions are not included.
- Data reported to Eurostat covers both flows and stocks. Because Eurostat reporting puts an emphasis on the deficit impact of measures, it will split recapitalisation and impaired asset measures into two parts: an expenditure component reported in flows which is directly impacting on the deficit of the state and an investment component reported on the asset side of the stocks. The State Aid Scoreboard will only report a single figure of State aid used for each measure.
- Data on flows reported to Eurostat include revenues received by the government. These figures are not reported through the State Aid Scoreboard.
- Data on stocks of liabilities, reported to Eurostat, include an imputed component. Unless a government intervention is financed specifically by means of dedicated liabilities – in which case these liabilities will be reported by Eurostat – the necessary state financing is imputed from the overall budget funding of the government.
- Some liabilities are reported under the separate heading "Contingent Liabilities" in the Eurostat reporting. Liabilities in this category do not have an immediate impact on government debt.
Two examples can demonstrate in practice the differences between the methodological approaches applied by Eurostat and DG Competition for the purposes of State Aid Scoreboard.
There are cases where a Member State injects a capital into a state owned-bank, under conditions which are determined to not constitute State aid within the meaning of Article 107(1) TFEU. Such a transaction will not be recorded in the State Aid Scoreboard statistics. Contrary to this, it will qualify as a government intervention (with the consequent impact on the government debt and, potentially, deficit/surplus) and therefore will be recorded in the Eurostat statistics.
Assuming that a similar transaction to the above, but not to a state-owned bank, is determined to constitute State aid within in the meaning of Article 107(1) TFEU, the value of that transaction will be included in the State Aid Scoerboard. On the other hand, in the Eurostat reporting the value of the transaction might be split into an expenditure component in flows – which is basically part of the transaction written off immediately – and an investment component which will increase the asset-side of the balance sheet recording the stocks. The figure in the State Aid Scoreboard will therefore look greater than either expenditure or balance sheet increase reported in Eurostat taken alone.