Correspondent's Choice

This article about bank bailouts was published by on 13th January 2010 by

The commissioner-designate for competition, Joaquin Almunia, will not ease the EU’s stance towards banks which received state aid during the financial crisis. Credit institutions will have to reimburse the aid by the end of 2010 and cannot use this financial support to increase bonuses, Almunia made clear during his hearing in front of the European Parliament.

“We have to be careful in deciding when, but if things go well, the temporary support scheme [for banks] will end at the end of 2010,” Almunia said yesterday (12 Janaury), answering questions from MEPs sitting on the Parliament’s economic and monetary affairs committee.

The commissioner-designate also confirmed the line adopted by his predecessor, Neelie Kroes, who said on many occasions that bailed-out banks should sell some of their assets to pay back public financial support received during the worst phase of the crisis.

“Banks which received aid have to disinvest,” Almunia underlined during his hearing. Each institution receiving public help must present a viable business model indicating an ability to remain financially sound after the crisis.

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