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II Acts whose publication is not obligatory

Commission

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COMMISSION DECISION

of 18 February 2004

on restructuring aid implemented by Germany for Bankgesellschaft Berlin AG

(notified under document number C(2004) 327)

(Only the German text is authentic)

(Text with EEA relevance)

(2005/345/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 regard to Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the EC Treaty (1), and in particular Article 7(3) thereof,

Having called on Member States and other interested parties to submit their comments (2) and having regard to their comments,

Whereas:

I.   PROCEDURE

II.   DESCRIPTION OF THE AID

III.   COMMENTS FROM GERMANY

IV.   COMMENTS FROM OTHER INTERESTED PARTIES

V.   GERMANY’S REACTION TO THE COMMENTS OF OTHER INTERESTED PARTIES

VI.   ASSESSMENT OF THE AID MEASURES

HAS ADOPTED THIS DECISION:

Article 1

1.   The following measures for the Bankgesellschaft Berlin AG group (‘BGB’) constitute state aid within the meaning of Article 87(1) of the EC Treaty:

2.   The aid measures referred to in paragraph 1 are compatible with the common market, provided that Germany fully observes the undertakings communicated by Germany and set out in Article 2(1) of this decision and in the Annex hereto and provided that the aid referred to in paragraph 1(c) does not give rise to a core‐capital ratio, as at 1 January 2004 of over 6 % for BGB group (taking into account the hiving‐off of IBB in accordance with Article 2(1)(d).

Article 2

1.   Germany has undertaken:

2.   Where appropriate, and on a sufficiently reasoned request from Germany, the Commission may:

If Germany requests that a deadline be extended, a sufficiently reasoned request shall be sent to the Commission at the latest one month before expiry of that deadline.

Article 3

Germany shall inform the Commission, within two months of notification of this decision, of the measures that have been taken and the measures it intends to take to comply with this decision.

Article 4

This decision is addressed to the Federal Republic of Germany.

Germany is required to forward a copy of this decision to the recipient of the aid immediately.

Done at Brussels, 18 February 2004.

For the Commission

Mario MONTI

Member of the Commission

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(1)OJ L 83, 27.3.1999, p. 1. Regulation as amended by the 2003 Act of Accession.

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

(3)OJ C 130, 1.6.2002, p. 5.

(4)  See footnote 2.

(5)  See footnote 2.

(6)  Parts of this text have been edited to ensure that confidential information is not disclosed: those parts are enclosed in square brackets.

(7)  Berliner Bank previously formed part of BGB, and Berliner Sparkasse formed part of LBB.

(8)  See footnote 2 and speech to the general meeting by Mr Vetter, chairman of the managing board, on 4 July 2003 (http://www.bankgesellschaft.de/bankgesellschaft/20_ir/30_hauptversammlung/index.html); see paragraph 298.

(9)  See http://www.bankgesellschaft.de/bankgesellschaft/50_pk/index.html (private customers, first giro accounts).

(10)  Answer given by Germany, June 2002; according to ‘Eurohypo’ decision of 19 June 2002 of the German antitrust authority (Bundeskartellamt), the leaders of the various segments of the real estate financing business in 2001, by portfolio and by new business, were the new firm Eurohypo, the Hypovereinsbank group, the Depfa group, the BHF group, and BayLB. Deutsche Bank itself, without the business it had contributed to the new Eurohypo, was likewise still ranked ahead of BGB, which the decision does not list among the leading competitors.

(11)  Since 1 May 2002, when banking, insurance and stock exchange supervision were merged, the Federal Institute for Financial Services Supervision (BAFin).

(12)OJ C 130, 1.6.2002, p. 5.

(13)  Published in Gesetz‐ und Verordnungsblatt für Berlin, 58th year, No 13, 24.4.2002.

(14)OJ C 141, 14.6.2002, p. 11.

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

(16)  Joined Cases C‐278/92, C‐279/92 and C‐280/92 Spain v Commission [1994]* ECR I‐4103.

(17)OJ C 288, 9. 10. 1999, p. 2.

(18)  See, for example, Commission Decision 98/490/EC of 20 May 1998 concerning aid granted by France to the Crédit Lyonnais group (OJ L 221, 8.8.1998, p. 28).

(19)  Commission observation: according to the agreement on German development banks, government assistance is a task for the public sector and does not therefore represent a commercial activity with implications for competition and so cannot be recognised as a compensatory measure. Institutional liability (Anstaltslast) and guarantor liability (Gewährträgerhaftung) can be preserved in the case of government assistance business only if that business is hived off to an independent development bank.

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

(21)  This theoretical, rounded maximum is arrived at by applying the methodology used in the Commission WestLB decision 2000/392/EC (OJ L 150, 23.6.2000, p. 1) to work out a normal market compensation, taking into consideration the judgment by the Court of First Instance of the European Communities of 6 March 2003 in Joined Cases T‐228/99 and T‐233/99, Westdeutsche Landesbank Girozentrale and Land Nordrhein-Westfalen v Commission, Rec. 2003, p. II-435, and the relevant data for LBB, plus compound interest.

(22)  See OJ C 146, 19.6.2002, p. 6, and OJ C 150, 22.6.2002, p. 7.

(23)OJ C 288, 9.10.1999, p. 2.

(24)  On the basis of the institutional liability, which is applicable until July 2005, the Land of Berlin is, as regards its internal relationship with LBB, required to provide LBB, as a public‐law body, with resources in such a way that it is able to perform its tasks. However, if the Land decides to terminate the business, the guarantor liability is triggered.

(25)  In 1993 the Land of Berlin issued a statement to the Deposit Guarantee Fund of private German banks regarding Berliner Bank AG, which had in the meantime merged with BGB, to the effect that, according to the German authorities, the risk of liability on the part of the Land of Berlin towards the Deposit Guarantee Fund was not, however, ruled out. It is to this case that the estimates refer.

(26)  This figure also took into account the hiving-off of the public development activities of IBB.

(27)  See, for example, Decision 98/490/EC.

(28)  In establishing the own‐funds ratio, the amount of additional capital taken into account may not exceed the amount of the available core capital.

(29)  See OJ C 146, 19.6.2002, p. 6 and OJ C 150, 22.6.2002, p. 7.

(30)  There may be discrepancies due to rounding.

(31)  Under the agreement on German development banks, development/support activities are a public service and not a commercial activity open to competition; they therefore cannot be viewed as compensatory measures. Institutional liability and guarantor liability can be maintained for the development business only if it is hived off as an independent development bank.

(32)  According to the Federal Cartel Office’s decision of 19 June 2002 in Eurohypo, the newly created Eurohypo, the Hypovereinsbank group, the Depfa group, the BHF group and BayLB led the various submarkets in the real estate financing sector in 2001, in terms of both existing and new business. Even Deutsche Bank itself (i.e. without its share in Eurohypo) came before BGB, which in this decision was not listed among the leading competitors with market shares of 5 % or more.

(33)  In Berlin a bank retains around 75‐90 % of its customers in the event of branch closures.

(34)  Market shares for the Berlin/Brandenburg region (around 14 to 27 % in personal banking and around 18 to 21 % in corporate banking) were submitted subsequently for the sake of completeness. The reason why they are far smaller is that, even before the latest restructuring measures involving divestments and closures of sites in Brandenburg, BGB’s presence in Brandenburg was limited. Updated country‐wide figures were no longer submitted.

(35)  Commission Decision of 11 March 1997 declaring the compatibility with the common market of a concentration (Case No IV/M.873 — Bank Austria/Creditanstalt) based on Council Regulation (EEC) No 4064/89 (OJ C 160, 27.5.1997, p. 4).

(36)  Commission Decision of 11 March 1997 (Case No IV/M.873 — Bank Austria/Creditanstalt); Commission Decision of 25 September 1995 declaring the compatibility with the common market of a concentration (Case No IV/M.628 — Generale Bank/Crédit Lyonnais Bank Nederland) based on Council Regulation (EEC) No 4064/89 (OJ C 289, 31.10.1995, p. 10).

(37)  Speech at the general meeting on 4 July 2003.

(38)  The divestment of Berliner Bank has to take effect by 1 February 2007 at the latest. It is possible therefore that the effects will be shown only in the balance sheet for 2007.

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ANNEX (1)

Article 2(1)(a)

Germany will ensure will that the notified restructuring plan, as last amended in accordance with the Federal Government communication of 29 January 2004, will be implemented, including all the undertakings contained in Article 2(1), in line with the timetable indicated therein. As regards those elements of the restructuring plan in respect of which no deadline is indicated, they are to be implemented forthwith and, in any event, in sufficient time to allow the deadlines specified to be met.

Article 2(1)(b)

Germany will ensure that the Land of Berlin introduces an open, transparent and non‐discriminatory tendering procedure as soon as the annual accounts of Bankgesellschaft Berlin AG for 2005 have been approved and completes the procedure by 31 December 2007.

In applying the review clause contained in Article 2(2) to the undertaking to sell, the Commission will take due account of the supply‐side conditions and the situation on capital markets.

Article 2(1)(c)

Germany will ensure that, for balance‐sheet purposes, the BGB group will, in accordance with the rules set out below, sell or liquidate by 31 December 2005 at the latest all holdings in real estate service companies that are covered by the risk shield of 16 April 2002.

By 31 December 2004 the Land and the bank will definitively determine those holdings in real estate service companies that appear suitable for sale to third parties. These holdings are to be sold by way of a transparent, open and non‐discriminatory tendering procedure.

Holdings in real estate service companies that are neither liquidated nor sold to third parties by the balance‐sheet date of 31 December 2005 will be acquired by the Land of Berlin on market terms. The purchase price will be determined by 31 March 2005 on the basis of a valuation carried out by an independent auditor commissioned by the Land, with a subsequent review by an independent auditor appointed by the bank. This will take place on the basis of recognised valuation procedures. In the event of a divergence between the two valuations and in the absence of agreement between the contracting parties, the value will be determined by a third expert to be appointed by the Institut der Wirtschaftsprüfer in Deutschland e.V. (German Auditors Institute). The independent value assessments will be sent to the Commission by 31 July 2005 at the latest.

The business of the real estate service companies that are to be transferred to the Land or wound up will be confined to the orderly management of the risks covered by the detailed agreement. The bank will invest in those companies to the extent necessary for that activity.

In order to avoid a heavy land transfer tax burden, a remaining holding of not more than 6 % in Immobilien- und Baumanagement der Bankgesellschaft Berlin GmbH (IBG) may remain within the Bankgesellschaft group. The group will not, however, have any influence over the management of IBG. Moreover, Immobilien und Beteiligungen Aktiengesellschaft (IBAG) can remain within the Bankgesellschaft group following the change of trade name and re-orientation of the Work‐out‐Competence Center as the holding company for the companies on the so‐called negative list (3) (companies excluded from the risk shield) in which the Bankgesellschaft group has shares. Apart from its function as the holding company for the companies on the negative list for the orderly administration and winding-up of the risks resulting from these companies and as the Work‐out‐Competence Center in connection with the liquidation of real estate financing, IBAG will, however, no longer carry on any real estate service business.

Article 2(1)(d)

Germany will ensure that, by 1 January 2005 at the latest, the development business of Investitionsbank Berlin (IBB), an unincorporated institution, which has to date been managed as a department of Landesbank Berlin (LBB), will be transferred to a new and independent development bank of the Land of Berlin.

The IBB special reserve of Landesbank Berlin will be used, to the extent possible on 1 January 2004, to provide capital for the new development bank and will, therefore, be hived off from Landesbank, without the core‐capital ratio (tier one) within the Bankgesellschaft group (following the hiving‐off of IBB) falling below 6 %, but not for an amount of more than EUR 1,1 billion.

The part of the IBB special reserve that may still be necessary to provide capital for the Bankgesellschaft group in accordance with the above paragraph will be injected into LBB by the Land of Berlin directly or indirectly as a contribution in kind (which may, however, not exceed EUR 1,1 billion) in the form of one or more dormant holdings ranking as core capital. A claim by the Land of Berlin on LBB for the transfer of the corresponding part of the special reserve can be created and will then be injected into the dormant holdings.

The dormant holdings bear interest at normal market rates. In this connection, when the contract to set up the dormant companies is signed, a mark‐up on a reference interest rate determined according to the comparable core‐capital instruments traded on the market will be calculated on the basis of the long‐term rating of LBB, taking into account the discontinuation of institutional and guarantor liability (Anstaltslast and Gewährträgerhaftung) and in compliance with the contractual form of the dormant holdings. The comparability of the core‐capital instruments will be determined on the basis of the contractual rules for those instruments and the rating of each issuer.

Article 2(1)(e)

Germany will ensure that the Bankgesellschaft group will sell the Berliner Bank department of LBB as an economic entity, inclusive at least of the trade name (and all related intellectual property rights), all private, corporate and other customers associated with the business carried on under the trade name Berliner Bank, the branches and the front‐office staff. The effective date for the number of customers, branches and front‐office staff is 31 December 2003, taking into account the planned implementation of the restructuring plan notified to the Commission in accordance with Article 2(1)(a) and natural business fluctuations, i.e. increases and decreases in the number of customers, staff, assets and liabilities, that are based on individual decisions (such as the relocation of customers or employees and dissatisfaction with the previous bank or employer) and not influenced by the bank. Other assets or staff may be included in the sale as appropriate. A trustee will closely monitor compliance with these conditions. The tendering procedure must be open, transparent and non‐discriminatory and must be started in 2005. It must be completed by 1 October 2006 so that the sale can take effect by 1 February 2007 at the latest.

Within three months of receipt of this decision, Germany will propose to the Commission a suitable trustee mandate and an independent trustee who will be required by law to observe professional secrecy and who will, at the expense of Germany, monitor the proper course of the sale and ensure in particular that the bank continues to restructure Berliner Bank in a sound business manner, invest in it and do nothing that will reduce its value, above all by transferring private or corporate customers or sales personnel to Berliner Sparkasse or to any other part of the Bankgesellschaft group. The trustee will take up his work without delay after having been commissioned. If the trustee discovers any irregularities, the Commission is to be notified immediately.

The buyer must be independent of Bankgesellschaft Berlin and must have the financial resources, proven expertise and incentives to maintain and develop Berliner Bank as a viable and active economic force in competition with Bankgesellschaft Berlin and other competitors. This does not rule out incorporation of Berliner Bank into the buyer’s company and corporate identity.

The amendments to the mid-term financial plan of 29 January 2004 that are necessary for the implementation of this commitment will be submitted forthwith by Germany to the Commission for approval.

General provisions governing implementation and reporting

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(1)  The following summarises the contents of the commitments communicated by Germany on 6 February 2004. The original German text of the communication contains the wording relevant for this decision.

(2)OJ L 336, 29.12.1998, p. 21.

(3)  Annexes 4.1, 11.1, 22.1, 29.1, 37.1.2 and 44.1 to the detailed agreement of 16 April 2002; Annex 25 to the notification.

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COMMISSION DECISION

of 14 July 2004

on the State aid implemented by Germany for MobilCom AG

(notified under document number C(2004) 2641)

(Only the German text is authentic)

(Text with EEA relevance)

(2005/346/EG)

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 establishing the European Economic Area, and in particular Article 62(1)(a) thereof,

Having regard to Council Regulation (EC) No 659/1999 of 22 March 1999 laying down detailed rules for the application of Article 93 of the Treaty establishing the European Community (1), and in particular Article 7(3) and (4) thereof,

Having called on the Member State and other interested parties to submit their comments pursuant to the provisions cited above (2), and having regard to their comments,

Whereas:

I.   PROCEDURE

II.   DETAILED DESCRIPTION OF THE AID MEASURES

1.   MobilCom AG

2.   The mobile telephony market

3.   Financial difficulties and restructuring

4.   Description of the restructuring plan

5.   Implementation of the restructuring plan

6.   Details of State guarantees granted

7.   Reasons for initiating/extending the proceedings

III.   COMMENTS FROM GERMANY

IV.   COMMENTS FROM THIRD PARTIES

1.   Comments from MobilCom

2.   Comments from Talkline GmbH & Co KG

3.   Comments from a third party which wished to keep its identity secret

V.   GERMANY'S RESPONSE TO THE COMMENTS SUBMITTED BY THIRD PARTIES

VI.   ASSESSMENT OF THE MEASURES

1.   The State guarantee on the EUR 112 million loan as aid

2.   Compatibility with the common market

(a)   Assessment of the second aid measure as restructuring aid

(b)   Compatibility with the restructuring guidelines

VII.   CONCLUSION

HAS ADOPTED THIS DECISION:

Article 1

The State aid which Germany granted to MobilCom AG and MobilCom Holding GmbH in the form of the 80 % deficiency guarantee that was assumed by the Federal Government and the Land of Schleswig‐Holstein on 20 November 2002 for the EUR 112 million loan granted to the company by the consortium of banks with the Kreditanstalt für Wiederaufbau as lead bank is compatible with the common market pursuant to Article 87(3)(c) of the EC Treaty provided that Germany complies with the condition set out in Article 2 of this Decision.

Article 2

1.   Germany shall ensure that MobilCom AG and all the companies in the MobilCom group close their online shops for direct online sales of MobilCom mobile telephony contracts for a period of seven months so that no new mobile telephony contracts (pre‐paid and/or post‐paid) can be concluded directly with MobilCom AG or the companies in the group via this distribution channel. The distribution of other suppliers' mobile telephony contracts via freenet.de AG shall not be affected.

2.   Germany shall ensure that, as long as the online shops are closed, MobilCom also suspends direct sales of its mobile telephony contracts via the websites of the MobilCom shops and that MobilCom AG and the other companies in the group do not take any other measures to circumvent this condition.

3.   During the period of closure pursuant to paragraph 1, customers may be informed on the websites concerned that it is not possible to conclude a new mobile telephony contract online. However, MobilCom AG may specify on its websites the addresses of distribution partners from which customers may obtain the desired service. Customers may not be passed on directly to another distribution partner by means of an automatic link.

4.   Germany shall ensure that the closure of the online shops commences within two months of the adoption of this Decision.

Article 3

Germany shall inform the Commission when the closure of the online shops commences. Within the first month of the closure of the online shops, it shall submit a report detailing all the steps taken to implement the measure. Furthermore, it shall inform the Commission immediately when the measure is terminated.

Article 4

This Decision is addressed to the Federal Republic of Germany.

Done at Brussels, 14 July 2004.

For the Commission

Mario MONTI

Member of the Commission

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(1)OJ L 83, 27.3.1999, p. 1. Regulation as amended by the 2003 Act of Accession.

(2)OJ C 80, 3.4.2003, p. 5.

(3)OJ C 288, 9.10.1999, p. 2.

(4)  See footnote 2.

(5)OJ C 210, 5.9.2003, p. 4.

(6)  After concluding a national roaming agreement with E‐Plus in April 2001, MobilCom was able to route voice and data messages through E‐Plus's GSM/GPRS network and already offer special nationwide voice and data services via GPRS under its own brand before its own UMTS start-up.

(7)  Xonio Mobilfunkreport 2002; annual report by the German telecommunications and post regulator (RegTP) 2002; market study of 10 March 2003 conducted by Deloitte & Touche on behalf of MobilCom.

(8)  Xonio Mobilfunkreport 2002; market study of 10 March 2003 conducted by Deloitte & Touche on behalf of MobilCom.

(9)  Quam has since withdrawn from the German mobile telephony market.

(10)  The MC Settlement Agreement has since been approved at the general meetings of MobilCom AG and France Télécom.

(11)  Parts of this text have been edited to ensure that confidential information is not disclosed; those parts are enclosed in square brackets and marked with an asterisk.

(12)  If the licence had been retained, this would not have been possible since licence holders may not be service providers at the same time.

(13)  [...]*.

(14)  Interim report, 1st quarter 2004, MobilCom AG.

(15)  Commission Notice on the application of Articles 87 and 88 of the EC Treaty to State aid in the form of guarantees, point 2.1.1 (OJ C 71, 11.3.2000, p. 14).

(16)  When the aid was granted, the relevant reference rate was 5,06 %; see the reference and discount rates for State aid in Commission letter SG(97) D/7120 of 18 August 1997.

(17)  See press releases issued by MobilCom on 27 September 2002.

(18)  2003: EUR 30 per subscriber (2002: EUR 28,60) and EUR 6,80 per pre‐paid customer (2002: EUR 5,20).

(19)  Company data.

(20)  Press release of 13 May 2004.

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