This afternoon I attended a hearing organised by the EESC’s Section for Economic and Monetary Union and Economic and Social Cohesion (‘ECO’, in our shorthand), chaired by Michael Smyth (United Kingdom, Various Interests), which hosted European Commission Vice-President with responsibility for competition, Joaquin Almunia. the Vice-President presented a study prepared by the Commission’s Directorate-General for Competition on the effects of the temporary State aid rules adopted to face the financial and economic crisis. By imposing conditions on bank rescues, “the Commission has reduced the amount of taxpayers’ money that has gone to financial institutions and has addressed the moral-hazard issue”, he argued. In order to approve bank bailouts, the Commission demands that banks remunerate and eventually repay the public support they receive; that they take measures to address distortions of competition towards their unaided competitors; that they restructure their business so that they can return to long-term viability without the need for more government support; and that shareholders and hybrid-capital holders bear a fair share of the burden. The public support to banks does not seem to have had significant lasting effects on the competitive structure. Mr Almunia also noted, highlighting the findings of the report. “First, Europe’s banks have not retrenched behind national borders; second, overall the restructuring of the banking sector did not accelerate the concentration trend that had been observed since 2001 […]. Finally, the public interventions have not affected the market performance of non-aided banks which, in fact, have performed a lot better than aided banks.” You can read the Commissioner’s speech in full here.