Since mid-2009, governments have been issuing less state aid to banks trying to stay afloat and continue lending to the real economy, according to a report published by the Commission yesterday (27 May).
In total, state guaranteed funding - including recapitalisation, approved by the EU executive's state aid rules - amounted to €1.24 trillion, less than a third of the €4.13 trillion that was set aside, the report concluded.
Guarantee schemes in 19 EU countries alone amounted to €3.15 trillion, of which 32% was actually issued to banks.
"While the situation remains fragile, it is crucial for the overall economy that banks do not stay dependent on the state for longer than is strictly needed and finance themselves increasingly in the market," said Joaquín Almunia, European Commission vice-president in charge of competition policy.
The commissioner also noted that though some had begun cutting off sources of state aid, others would need to be shown the exit, which could involve restructuring.
The scoreboard comes after the EU's finance ministers called for banks to pay higher fees for their credit guarantees as of July this year (EurActiv 17/05/10).
Finland, Poland and Slovakia introduced guarantee schemes which have never been used, according to the Commission.
As a further sign of normality in capital markets, France, Italy and the UK decided to suspend state aid to banks.
Throughout the financial crisis, banks have swallowed up state aid to varying degrees, with Ireland's banks receiving the biggest lump sum, representing 231.8 % of its GDP.
