State Aid and Fiscal Costs

Małgorzata Iwanicz-Drozdowska, Elżbieta Malinowska-Misiąg and Bartosz Witkowski

Chapter 3 in European Bank Restructuring During the Global Financial Crisis, 2016, pp 31-55 from Palgrave Macmillan

Abstract: Abstract This chapter presents overall rules for the provision of state aid and the fiscal burden related to that aid. Soon after the collapse of Lehman Brothers, in October 2008, the European Commission issued the so-called ‘first banking communication’ to facilitate the financial support for banks. In 2010, it became necessary to provide financial support to countries. In 2012, the European Stability Mechanism was established. All in all, the net state aid (state aid less repayments) provided to banks in the form of recapitalization and capital provided for asset management companies from 2008 to 2013 equalled EUR 535.6 billion. The state aid imposed a heavy burden on public finance in some EU countries, with Ireland presenting the heaviest.

Keywords: Financial Institution; Banking Sector; Public Debt; Banking Communication; Fiscal Consolidation (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-1-137-56024-7_3

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DOI: 10.1057/9781137560247_3

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