Question by Sahra Wagenknecht, 9 February 2006

1. Is it correct to say that the restructuring aid for the Bankgesellschaft Berlin AG (BGB) was approved by the European Commission only on the strict condition that, in addition to selling the Berliner Bank and other subsidiaries of the Bankgesellschaft Berlin AG, the Bankgesellschaft Berlin AG itself, including the Berliner Sparkasse, must be privatised and sold by the end of 2007?

2. In the decision of 18 February 2004, why does the Commission deviate from the previously standard practice of geographic market definition in merger control, which defines the markets in the finance sector as being national in scope, with the exception of finance and investment services? How will the Commission's decision to define the local or regional market in retail banking as the relevant geographical market affect the various banking groups (savings banks, cooperative banks, private business banks), and how will it affect the competition in the German, i.e. national, banking sector?

3. Does the Commission think it is justifiable to retain the condition requiring the sale of the Berliner Bankgesellschaft, including the Berliner Sparkasse, after the sale of the Berliner Bank and after the associated market share of the BGB in the individual segments of the Berlin retail business has been reduced by between one third and one sixth?

4. How is the Commission's argument in favour of privatisation of the Berliner Bankgesellschaft including the Berliner Sparkasse (see OJ L 116/39, paragraphs 255 and 256) to be reconciled with Article 295 of the EC Treaty, which clearly attributes competence for systems of property ownership to the Member States? How are such conditions to be reconciled with the Brussels agreement of 18 July 2001 on institutional and guarantor liability, in which it was again confirmed that there would be no infringement on the public legal form of savings banks?

Answer given by Mrs Kroes on behalf of the Commission, 2 March 2006

1. In its Decision 2005/345/EC of 18 February 2004(1), the Commission approved the grant of restructuring aid to Bankgesellschaft Berlin (BGB) subject to Germany's compliance with its commitments as stated in Article 2(1) of the decision. Amongst other things, Germany had undertaken to ensure that the BGB group sells the 'Berliner Bank' division of Landesbank Berlin (LBB) in accordance with the conditions laid down in the decision's annex (Article 2(1)(e)) and that the Land Berlin sells its holding in BGB in accordance with the conditions laid down in the annex (Article 2(1)(b)).

2. As stated in the decision, points 294 and 295, the Commission in the area of merger control has indeed, to date, generally assumed that the markets in the financial sector are national in scope but nevertheless has left room for a regional definition in private customer and corporate banking as far as concerns services for small and medium sized enterprises (SMEs). The Commission, moreover, explained that for the purposes of this particular decision, i.e. restructuring aid favouring BGB, it was not necessary to precisely define the geographic market, since market dominance had not to be proven (as in merger control). Instead, the Commission had to assess whether the compensatory measures proposed by Germany were sufficient in view of the distortive effects of the aid. In that context, it was indisputable that the aid had helped the bank to remain on the various markets and, for example, to preserve its strong position on the Berlin retail market.

3. In the Commission's view, the completed, planned and promised divestments, closures and reductions of other kinds are necessary as a whole not only to mitigate the distortive effect of the aid measures at issue but also to ensure the viability of the proposed restructuring plan including Land Berlin's divestment of its holding in BGB.

4. The Commission would like to point out that the divestment of BGB, including the Berliner Sparkasse, has been envisaged by the Land Berlin as part of the restructuring plan. The Commission's position is neutral regarding the private or public nature of the potential new owner of BGB in line with Article 295 EC and the 'Brussels agreement' of 18 July 2001. The Commission will, however, insist that Germany's commitments as laid down in its Decision 2005/345/EC of 18 February 2004 and its annex will be complied with.

(1) Commission Decision 2005/345/EC of 18 February 2004 on restructuring aid implemented by Germany for Bankgesellschaft Berlin AG (notified under document number C(2004) 327), OJ L 116, 4.5.2005.