Press Release: State aid: Commission temporarily approves urgent rescue aid for WestLB; opens in-depth investigation into bad bank

The European Commission has temporarily approved, under EU state aid rules, the setting up of a "bad bank" for German Landesbank WestLB which takes over a portfolio of toxic and non-strategic assets with a nominal value of €85.1 billion. To this end, WestLB is receiving capital of €3 billion from Germany (SoFFin). The Commission has given its temporary approval of the measures because it is necessary for reasons of financial stability. However, the Commission has doubts that the measures are compatible with state aid rules for impaired asset relief as well as with those for the restructuring of banks. The Commission has therefore opened a formal in-depth investigation under Article 108(2) of the Treaty on the Functioning of the European Union - TFEU.