The EU General Court annuls a Commission decision ordering the recovery of a €300M rescue package for a failing bank from a consortium of banks reasoning that the fact that the consortium has a public mandate does not necessarily mean the rescue package qualifies as State aid (Banca Popolare di Bari / Fondo interbancario di tutela dei depositi / Banca d’Italia / Banca Tercas)

In Short The Situation: The EU General Court annulled the European Commission's ("Commission") decision that Fondo Interbancario's support payment to financially distressed Banca Tercas breached EU State aid rules. Fondo Interbancario is a mandatory deposit guarantee scheme in Italy. Background: To eliminate competitive advantage gained from government support, the Treaty on the Functioning of the European Union prohibits State aid to undertakings unless it is justified by special reasons (e.g., economic development in special areas or sectors, social aids, natural disasters, etc.). Looking Ahead: Rescue interventions to distressed banks from private deposit guarantee schemes are