Press Release: State aid: Commission approves UK support scheme for financial institutions

The European Commission approved under EC Treaty state aid rules a UK package intended to stabilise the financial markets. The package provided new capital to eligible banks and building societies, guarantee short and medium term debt to encourage inter-bank lending and offer liquidity to banks under strict conditions. The measures were notified and assessed over the weekend and approved today under a new accelerated procedure for emergency rescue measures. The Commission found the measures to be compatible with EU state aid rules, because they were an appropriate means to remedy a serious disturbance in the UK economy (Article 87.3.b of the EC Treaty), while avoiding unnecessary distortions of competition. In particular, the package provides for non-discriminatory access, is limited in time and scope and contains safeguards to avoid the abuse of the scheme. The UK measures conformed to the guidance just issued by the Commission.