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European Commission Approves State Aid for Nea Proton Bank

The European Commission approved state aid for Nea Proton Bank of 1,7 billion Euros in the context of the Nea Proton Bank resolution. The EC temporarily approved the aid until the investigation it has committed it has started ends up with conclusions. During the investigation, third parties have the possibility to comment on the measures. The investigation is on whether the state aid is in line with the EU legal framework.

Proton Bank was resolved on 9 October 2011 and it’s banking license was withdrawn. Most of the liabilities and assets were transferred to Nea Proton Bank  (bridge bank). As the assets were transferred at their fair value andwith that, not all of them, the new bank had more liabilities than assets. The gap was filled by a contribution from the Hellenic Deposit and Investment Guarantee Fund (“HDIGF”) and the initial capital of Nea Proton Bank was provided by the resolution arm of the Hellenic Financial Stability Fund (“HFSF”). Since the amount will not be reimbursed and it will not create profit for the Greek state, the Commission concluded that it is state aid. These measures served to rescue the economic activities of the former Proton Bank, which will continue in a new legal entity, Nea Proton Bank. These activities would otherwise have disappeared.

Although the Greek government has submitted a plan to restore the competitiveness of the new bank, the Commission had doubts whether this is the least costly solution and whether the new bank will succeed without further state aid.

Source: (European Commission)

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