The European Court of Auditors is conducting an audit of EU monitoring of public support granted to the financial sector over recent years. In particular, the auditors will examine how the European Commission ensures that aid remains exceptional and limited to what is strictly necessary. They will also assess the appropriateness and effectiveness of the procedures in place for state aid control.
Because it could distort competition in the internal market, state aid (i.e. public financial support) is generally prohibited under EU law. But government intervention might be necessary and authorised in some particular circumstances, such as the 2008 financial crisis. Between 2008 and 2017, the EU approved aid to the financial sector for an overall amount of €1 459 billion of capital-like aid and additional €3 659 billion of liquidity aid. The Commission has sole responsibility for controlling such state aid.
The auditors have today published an Audit Preview on EU control of state aid to banks. Audit Previews provide information on an ongoing audit task. They are designed as a source of information for those interested in the policy or programmes being audited.
“From the 2008 crisis until today even, the financial services sector has received far more state aid than any other sector of the economy”, said Mihails Kozlovs, the Member of the European Court of Auditors responsible for the audit. “Appropriate and thorough control of this state aid is crucial to safeguard competition in the internal market as well as to protect EU taxpayers against the burden of bank rescues.”