On 21 December 2016, the European Court of Justice
("ECJ") issued a ruling on the guarantee scheme granted
by Belgium to three financial cooperatives of the ARCO group
("ARCO") (Case C-76/15, Paul Vervloet and Others v
The judgment of the ECJ stems from a request for a preliminary
ruling from the Belgian Constitutional Court, which had to rule on
several questions with regard to the constitutionality of the ARCO
guarantee. In November 2011, the Belgian authorities decided to
grant to 800,000 ARCO members the same protection as that provided
for savings deposits and life insurance, i.e., a
protection of funds limited to € 100,000 per
By decision of 3 July 2014, the European Commission classified
the ARCO guarantee as unlawful state aid (since it was not notified
in a timely manner) and incompatible with the internal market. The
three financial cooperatives and Belgium brought an action before
the General Court for annulment of the Commission's decision.
Those proceedings were however stayed pending the ECJ's
response to the questions referred by the Belgian Constitutional
Court in the present proceedings.
The ECJ was asked to rule on the compatibility of the ARCO
guarantee with EU law, in particular with Directive 94/19/EC of 30
May 1994 on deposit-guarantee schemes ("Directive
94/19/EC"), and on the validity of the Commission's
decision of 3 July 2014.
The ECJ held that, while Directive 94/19/EC does not impose on
Member States an obligation to adopt a guarantee scheme with regard
to shares in recognised cooperatives operating in the financial
sector, such as ARCO, Member States are not prevented from
extending the application of the Directive. However, such extension
must not undermine the practical effectiveness of the scheme that
Directive 94/10/EC requires Member States to establish. This
assessment must be made by the national courts, which must take
into account, inter alia, the number of beneficiaries of
the additional guarantee and the beneficiaries' contributions
towards the financing of the guarantee. In addition, the ECJ
stressed that national courts must assess whether the extension is
compatible with the Treaty, in particular the provisions relating
to state aid.
As regards the state aid rules, the ECJ confirmed the validity
of the Commission's decision of 3 July 2014. The ECJ considered
that the Commission did not erroneously classify the ARCO guarantee
as state aid, that the Commission's decision was sufficiently
reasoned and that the Commission was entitled to conclude in its
decision that the guarantee scheme was unlawfully put into effect
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