By Simon Zekaria - 4th March 2004
The European Commission has cleared state funding of ten Czech banks on grounds of competition law.
Newswire CTK on Thursday reported the EU has approved government financial aid in the 1990s to Ekoagrobanka, Union banka, Foresbanka, Bankovni dum Skala, Banka Hana, Coopbanka, Banka Moravia, Evrobanka, Pragobanka and Universal banka.
The aid has been cleared because the state support will not continue after May 1 – the date of enlargement when the Czech Republic joins nine other states as members of the EU.
EU laws allow leeway for financial measures set up within a specific time-period and for a specific purpose – under a special competition ‘amnesty’ made for accession countries.
State aid is only deemed to be ‘applicable’ after accession when it is spread across multiple ventures and when there is an unfixed time period and amount for the aid.
It is one of a series of decisions taken by EU regulators on banks in the Czech Republic.
Late in January, commission regulators did not challenge aid given to former state-owned bank Ceska Sporitelna.
Ceska Sporitelna was one of a number of Czech banks receiving aid by the government during a four-year period between 1994 and 1998 to combat economic restructuring and privatisation.
The commission has still to clear assistance given to bank CSOB.
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