EC approves Lloyds Banking Group restructuring plan

The European Commission has approved under EC Treaty state aid rules the restructuring plan of Lloyds Banking Group.

Under a package of financial support measures approved by the Commission on 13 October 2008, the Lloyds Banking Group received a state recapitalisation of £17 billion (some &euro19 billion). The approval of this recapitalisation was conditional upon the submission of a restructuring plan. This plan was submitted to the Commission on 16 July 2009 and contained additional state aid measures. Having assessed the past and new aid on the basis of the notified plan, and in view of amendments agreed by the UK authorities, the Commission is satisfied that it is in line with its restructuring communication and as such compatible with EU rules on state aid to remedy a serious disturbance in a Member State’s economy Article 87(3)(b) of the EC Treaty. In particular, the measures foresee that Lloyds will pay a significant proportion of the restructuring costs, ensure a sustainable future for Lloyds without continued state support and that there will not be undue distortions of competition.

Competition Commissioner Neelie Kroes said: “This plan effectively addresses the Commission’s competition concerns and at the same time ensures the return of Lloyds Banking Group to long term viability. This decision once again demonstrates the important role that the EU’s state aid rules play in facilitating sustainable bank restructuring whilst preventing undue distortions of competition. This is to the clear benefit of both customers and taxpayers””.