Press Release: State aid: Commission authorises modification of French scheme to inject capital into certain credit institutions

The European Commission approved, under EC Treaty state aid rules, a modification of the French scheme to inject capital into credit institutions which it approved on 8 December 2008. The change to the scheme essentially entailed giving banks the option to use preference shares instead of subordinated debt securities for their recapitalisation by the State. Banks will also be able to convert subordinated debt securities already issued into preference shares. The Commission also approved an increase in the budget for the second recapitalisation tranche, which is to go up from EUR 10.5 billion to EUR 11 billion, and an extension of the scheme to 31 August 2009. The modified scheme was consistent with the Commission's recommendations on support measures for banks during the crisis. It provided in particular for an adequate remuneration of state intervention.