Action brought on 9 September 1997 by The Norwegian Bankers' Association against the EFTA Surveillance Authority (Case E-4/97) (97/C 366/06)

An action against the EFTA Surveillance Authority was brought before the EFTA Court on 9 September 1997 by The Norwegian Bankers' Association, represented by Jonas W. Myhre, Supreme Court advocate, Hjort DA, Postboks 471 Sentrum, N-0105 Oslo.

The applicant claims that:

1. The decision of the EFTA Surveillance Authority of 9 July 1997 concerning 'Husbanken` is annulled (Decision No 177/97).

2. The EFTA Surveillance Authority shall bear the Applicant's costs connected with the legal action.

Factual background:

- The Norwegian Bankers's Association was established in 1915. The members of the association, a total of 28, are banks, mortgage institutions and other financial institutions that are entitled by law to carry on activities in Norway,

- Husbanken is a State institution governed by Act No 3 of 1 March 1946 relating to the Norwegian State housing bank (Lov om Den Norske Stats Husbank). Husbanken provides house-building loans on a large scale without means-testing of the applicants, but requirements are applied as to size and standard,

- it is the opinion of the Norwegian Bankers' Association that the present arrangement for publicly-supported housing finance through Husbanken is highly detrimental to competitive conditions in the Norwegian credit and makes it impossible for the member institutions of the Association to compete on equal terms with Husbanken in the area of basic security loans for new dwellings,

- on these grounds, the Norwegian Bankers' Association decided to lodge a complaint dated 7 November 1995 on behalf of its member institutions concerning the framework conditions for Husbanken with the EFTA Surveillance Authority,

- On 9 July 1997, the EFTA Surveillance Authority took the following decision:

1. 'The complaint initiated by letter of 7 November 1995 (Doc. No 96-6439-A) concerning the framework conditions for Husbanken and their compatibility with the provisions of the EEA Agreement on State aid and competition, is closed without further action by the Authority.

2. The Norwegian Authorities, the complainant and the European Commission shall be informed by means of a copy of this decision.`

Pleas in law and main arguments adduced in support

- The applicant refers to Article 36 of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice, signed on 2 May 1992, for annulment of the abovementioned decision of the EFTA Surveillance Authority.

- The application is based on the following grounds:

- the EFTA Surveillance Authority has not instigated formal proceedings concerning State aid, in spite of the fact that the EFTA Surveillance Authority, in its contested decision of 9 July 1997, has concluded that Husbanken is the recipient of State aid which is not compatible with Article 61 of the EEA Agreement,

- in its handling of the complaint from the Norwegian Bankers' Association, the EFTA Surveillance Authority has failed to comply with essential procedural requirements, namely its obligation to provide an adequate statement of reasons according to Article 16 of the Agreement between the EFTA States on the Establishment of a Surveillance Authority and a Court of Justice,

- the EFTA Surveillance Authority has wrongfully interpreted and applied Article 59 (2) of the EEA Agreement when it found that restrictions or distortions of competition as a result of the framework conditions for Husbanken do not go beyond what is required to allow the undertaking to perform the services of general economic interest with which it has been entrusted and thus that the aid granted by the Norwegian State should be allowed by way of derogation under the abovementioned