The Approach to State Aid in the Restructuring of the Financial Sector

The unprecedented nature of the financial crisis in autumn 2008 led the European Commission to approve a series of state support measures for the financial sector under Article 87(3)(b), which allows for aid to be considered compatible with the common market if it is "to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a Member State." There was a consensus that the very serious financial crisis constituted a "serious disturbance" to the European economy. There are minimal precedents on the use of Article 87(3)(b), and therefore the Commission has advanced a framework for the analysis, especially in its communication, The Return to Viability and the Assessment of Restructuring Measures in the Financial Sector in the Current Crisis under the State Aid Rules. This paper discusses that communication and the appropriate framework for analyzing aid to the financial sector given under Article 87(3)(b).