European Commission Guidance on State Aid and the Financial Crisis

On October 13, 2008, the European Commission released an important Communication regarding the application of its State aid rules to measures taken during the current global financial crisis to support financial institutions. This new guidance is a contribution by the Commission to the efforts taken at the European and world levels to restore confidence in financial markets, which include the Eurogroup statement of October 12 and the coordinated national schemes announced by several European Member States on October 13 to safeguard the financial system. The Commission had already approved (in record time) certain other support schemes triggered by the financial crisis. Immediately after releasing the Communication, the Commission approved the Irish and British general support schemes on the basis of the principles outlined in the Communication, which will likely be applied to the other schemes announced by Member States over the last few days.