ECOFLASH: The FITD’s support measures adopted for the benefit of Banca Tercas did not constitute State aid

The General Court of the European Union has annulled the European Commission’s decision that the support measures granted to Banca Tercas by the Italian deposit guarantee fund (FITD) constituted State aid. The General Court found that the European Commission did not have sufficient evidence to conclude that the measures in support of Banca Tercas entailed the use of State resources and were imputable to the State.

The cost of the support measures was estimated to be lower than the cost of using the deposit guarantee scheme if Banca Tercas had been placed under compulsory liquidation. The measures, adopted voluntarily by a consortium of banks in support of one of its members, was therefore intended to protect their private interests. Those private interests happened to coincide with the public interest.

Since the bank’s capital needs were met solely with private resources, the measures did not circumvent the framework provided for by the European Bank Recovery and Resolution Directive (BRRD) or rules on State aid. As a result, the outcome is not an exception to the bail-in principle.

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