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Sale of Piraeus Bank's Bulgarian subsidiary to Eurobank did not breach EU state aid rules, EU Commission says

EPA/ALEXANDROS VLACHOS
A woman passes in front of a branch of Eurobank in central Athens, Greece, on 26 October 2014.

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After examining a complaint received in January 2019 that led to the opening of a formal investigation procedure, the European Commission confirmed on Wednesday the compliance of the sale of Piraeus Bank’s Bulgarian subsidiary to Eurobank, with EU State aid rules.
Greece had granted in 2015 state aid for the restructuring of Eurobank and Piraeus Bank, which was approved by the EU Commission under EU State aid rules and on the basis of certain circumstances.
For Piraeus Bank, one of the prerequisites was selling foreign subsidiaries before the end of 2018, while concerning Eurobank, the bank would be subject to an acquisition ban until the end of 2018.
Eurobank, Greece’s third-largest lender, announced in June 2019 that its Bulgarian subsidiary Postbank concluded on the acquisition of Piraeus Bank’s Bulgarian unit after obtaining regulatory approvals, – a process that started in November 2018.
One of the unsuccessful bidders filed a complaint, supporting that the sale of Piraeus Bank’s Bulgarian subsidiary to Eurobank breached the 2015 commitments as it exceeded the foreseen timeline, and that the aid given by the government constituted illegal state aid.
However, the Commission found out that the seven-month delay did not affect the compatibility of the aid granted by Greece for the bank’s restructuring and that throughout the process, all EU State aid rules were followed and no excessive aid was granted to Eurobank in the context of the sales process.
Although the Functioning Treaty of the European Union contains a general prohibition of state aid, in some circumstances, government intervention is considered necessary for a well-functioning economy to offset market failure.

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