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Bailouts for banks

The European Commission has supervised Member States' massive bank bailouts under the EU's state aid rules to ensure that the bailouts did not give rise to major distortions of competition within the EU's Single Market. In particular, the Commission required substantial restructuring of banks receiving aid (including major cuts in their activities) to ensure their future viability without further public support and to offset distortions of competition caused by the subsidies received (Examples: Northern Rock – more than £30 billion, RBS – more than £20 billion, Lloyds - £23 billion, ING – over €22 billion, Hypo Real Estate – €175 billion, HSH Nordbank - €30 billion, LBBW – over €17 billion etc.). This ensured that healthy banks were not put out of business by unfair competition from banks receiving subsidies, whilst allowing the banking sector to continue to finance investment and so create jobs.
The Commission has authorised up to €4.5 trillion (1/3 of EU GDP) of state support, of which €1.6 trillion has been used.

Balance of Payments Facility

Medium-term financial assistance of up to €50 billion for Member States that have not adopted the euro is available under a Regulation adopted by the EU's Council of Ministers in 2002. The amount that can be loaned to each non-euro country is €12 billion. In return for loans, recipient countries must agree to implement economic policy adjustments to remedy the underlying causes of their difficulties. The money is borrowed by the Commission on behalf of the EU on capital markets or from financial institutions and made available through the European Central Bank. Since the financial crisis began, Latvia (€2.9 billion), Romania (€5 billion) and Hungary (€5.5 billion) have received loans under this Facility.

Banking Union

Following the June 2012 European Council meeting, Member States committed to working towards a Banking Union, comprising a Single European Banking Supervision and a common deposit insurance and resolution framework.

Integrated supervision of European banks will ensure the effective application of prudential rules, risk control and crisis prevention across the EU. Meanwhile, the European deposit insurance scheme will serve as an important assurance that eligible deposits of all credit institutions are sufficiently insured. The European resolution scheme will provide assistance in the application of resolution measures, with the aim of winding down non-viable institutions.