The European Commission approves State guarantee granted by the Austrian government in the banking sector (BAWAG-PSK)

"Enforcement of State aid control in the banking sector: BAWAG-PSK"* On 27 June 2006 the Commission decided to approve a State guarantee of € 900 million granted to BAWAG-PSK by Austria [1]. The guarantee provided collateral for specific bad loans with the consequence that the assets remained valuable and no value adjustments had to be carried out. The exit of inefficient firms is a normal part of the operation of the market. Therefore, the provision of rescue or restructuring aid to firms in difficulty may only be regarded as legitimate subject to certain conditions. The Commission authorizes restructuring aid only under the following conditions: i) a restructuring plan, which must be endorsed by the Commission, has to be prepared, and fully implemented, restoring the firm’s

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Martin Löffler, Daniel Boeshertz, The European Commission approves State guarantee granted by the Austrian government in the banking sector (BAWAG-PSK), 27 June 2006, e-Competitions Bulletin Financial services, Art. N° 35316

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