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            COMMISSION DECISION         

of 20 October 2004         

on State Aid implemented by Germany for Landesbank Berlin — Girozentrale

(notified under document number C(2004) 3924)

(Only the German text is authentic)

(Text with EEA relevance)

(2006/736/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community, and in particular the first subparagraph of Article 88(2) thereof,

Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a) thereof,

Having called on the Member State and other interested parties to submit their comments pursuant to the provisions cited above (1) and having regard to their comments,

Whereas:

I.   PROCEDURE

II.   DETAILED DESCRIPTION OF THE MEASURES

1.   LANDESBANK BERLIN — GIROZENTRALE (‘LBB’)

2.   TRANSFER OF WBK TO LBB

3.   CAPITAL REQUIREMENTS UNDER THE OWN FUNDS AND SOLVENCY DIRECTIVES

4.   EFFECTS OF THE TRANSFER ON LBB'S CAPITAL BASE

III.   GROUNDS FOR INITIATING THE PROCEDURE

IV.   COMMENTS FROM GERMANY

V.   COMMENTS FROM OTHER INTERESTED PARTIES

VI.   GERMANY'S RESPONSE TO THE COMMENTS OF OTHER INTERESTED PARTIES

VII.   UNDERSTANDING BETWEEN THE BDB, THE LAND OF BERLIN AND LBB

VIII.   ASSESSMENT OF THE MEASURES

1.   ON THE GENERAL QUESTION OF THE LIMITATION PERIOD

2.   STATE AID WITHIN THE MEANING OF ARTICLE 87(1) OF THE EC TREATY

2a.   STATE RESOURCES

2b.   FAVOURING OF A PARTICULAR UNDERTAKING

(1)   Market-economy investor principle

(2)   Article 295 of the EC Treaty

(3)   Ownership structure

(4)   Remuneration and elements of remuneration

Capital basis for calculating the remuneration

Appropriate remuneration for the nominal capital and the special-purpose reserve

Comparison with other equity instruments

Liquidity costs of the special-purpose reserve

Determination of a likely minimum remuneration for the special-purpose reserve and the nominal capital

No return premium on account of the 100 % ownership

No reduction in the remuneration to take account of the agreement of a fixed amount

Overall remuneration for the nominal capital and the special-purpose reserve

Appropriate remuneration for the amounts needed for the promotion-related business

(5)   Aid element

2c.   DISTORTION OF COMPETITION AND EFFECT ON TRADE BETWEEN MEMBER STATES

3.   COMPATIBILITY OF THE MEASURE WITH THE EC TREATY

4.   NO EXISTING AID

5.   CONCLUSION

HAS ADOPTED THIS DECISION:

Article 1

The state aid amounting to €810,14 million which Germany implemented for Landesbank Berlin — Girozentrale from 1 January 1993 to 31 August 2004 is incompatible with the common market.

Article 2

Germany shall take all necessary measures to recover from the recipient the aid referred to in Article 1 and unlawfully made available to the recipient.

Article 3

Recovery shall be effected without delay and in accordance with the procedures of national law, provided that they allow the immediate and effective execution of this Decision.

The aid to be recovered shall include interest from the date on which it was at the disposal of the recipient until the date of its recovery.

Interest shall be calculated in accordance with the provisions of Chapter V of Commission Regulation (EC) No 794/2004 (36).

Article 4

Germany shall inform the Commission, within two months of notification of this Decision, of the measures taken to comply with it, using the questionnaire attached in the Annex to this Decision.

Article 5

This Decision is addressed to the Federal Republic of Germany.

Done at Brussels, 20 October 2004.

For the Commission

Mario MONTI            

Member of the Commission

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(1)OJ C 239, 4.10.2002, p. 12.

(2)OJ L 150, 23.6.2000, p. 1.

(3)  Joined Cases T-228/99 and T-233/99 [2003] ECR II-435.

(4)OJ C 239, 4.10.2002, p. 12.

(5)  Paragraphs 32 et seq. and 141 of the Commission decision on restructuring aid for Bankgesellschaft Berlin AG (not yet published in the Official Journal).

(6)  Since 1 May 2002 following the merger of the banking, insurance and stock market regulators: Bundesanstalt für Finanzdienstleistungsaufsicht (BAFin).

(7)OJ C 141, 14.6.2002, p. 2.

(8)  Paragraphs 32 et seq. and 141 of the Commission decision on restructuring aid for Bankgesellschaft Berlin AG (not yet published in the Official Journal).

(9)  Paragraphs 32 et seq. and 141 of the Commission decision on restructuring aid for Bankgesellschaft Berlin AG (not yet published in the Official Journal).

(10)OJ L 386, 30.12.1989, p. 14; replaced by Directive 2000/12/EC of the European Parliament and of the Council (OJ L 126, 26.5.2000, p. 1).

(11)OJ L 124, 5.5.1989, p. 16; replaced by Directive 2000/12/EC.

(12)              0,25 % before tax and 0,11 % after tax according to a remark in the relevant table submitted for the period 1995-98; however, there is no indication as to which taxes are concerned.

(13)OJ L 83, 27.3.1999, as amended by the 2003 Act of Accession.

(14)  This amount was no longer attributed to assets.

(*1)  Confidential information, hereinafter [...].

(15)  Paragraph 162 of the Decision, see footnote 2.

(16)  Profit and loss statements published in the Hoppenstedt company database; the 35 banks selected include 4 large private banks, 5 other private banks, 17 public-sector institutions, 2 cooperative banks and 7 mortgage-lending institutions.

(17)  Paragraph 182 of the Decision, see footnote 2.

(18)  NN 53/2001; Commission decision of 25 July 2001.

(19)  See footnote 1.

(20)OJ L 308, 21.12.1995, p. 92.

(21)OJ L 221, 8.8.1998, p. 28.

(22)OJ L 319, 29.11.1974, p. 1. Regulation as amended by Regulation (EC) No 1/2003 (OJ L 1, 4.1.2003, p. 1).

(23)  [2003] ECR II-1763.

(24)  Ibid paragraph 60.

(25)  This amount has since no longer been attributed to IBB's assets.

(26)  See footnote 3.

(27)  Commission communication to the Member States on the application of Articles 92 and 93 of the EEC Treaty and of Article 5 of Commission Directive 80/723/EEC to public undertakings in the manufacturing sector (OJ C 307, 13.11.1993, p. 3, point 11). While this communication deals explicitly with the manufacturing sector, the principle can undoubtedly be applied in the same way to all other sectors. As regards financial services, this has been confirmed by a number of Commission decisions, e.g. Crédit Lyonnais (OJ L 221, 8.8.1998, p. 28) and GAN (OJ L 78, 16.3.1998, p. 1).

(28)  Paragraph 245 of the judgment, see footnote 3.

(29)  Paragraph 246 of the judgment, see footnote 3.

(30)  Of course, in reality the situation is much more complex because of off-balance-sheet items, different risk weightings of assets or zero-risk items, etc. However, the principal reasoning holds.

(31)  The situation does not change if one takes into account the possibility of raising additional own funds up to the same amount of original own funds (a factor of 25 instead of 12,5 for original own funds).

(32)  According to documents provided by the German Government, the corporation tax rate was 46 % in 1992, plus a solidarity surcharge of 3,75 %, i.e. 49,75 % in total. The overall tax rate fell to 46 % in 1993 and stood at 49,5 % from 1994 to 2000. From 2001 the overall tax rate was 30 %.

(33)  Paragraph 221, see footnote 2.

(34)              1.1.-31.8.2004. Afterwards €1,1 billion of IBB's special-purpose reserve converted into silent partnership contribution by Land to LBB with normal market remuneration

Since 1.1.1999 DEM converted to euro at 1,95583. Figures in DEM must be converted to euro accordingly.

(35)  This report was presented to the Ecofin Council on 23 November 1998 but has not been published. It can be obtained from the Competition Directorate-General of the Commission and can also be found on the Commission's website.

(36)OJ L 140, 30.4.2004, p. 1.

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ANNEX

INFORMATION REGARDING THE IMPLEMENTATION OF THE COMMISSION DECISION

1.   Calculation of the amount to be recovered

2.   Recovery measures planned or already taken

3.   Recovery already effected

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(1)

(*1)  Amount of aid put at the disposal of the recipient, in gross grant equivalent.

(2)

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