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 Ministerraad).
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 investor.
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 by Belgium.
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