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PR(97)08: The EFTA Surveillance Authority closes its examination of the Norwegian state housing bank


The EFTA Surveillance Authority has decided to close without further action its examination of the framework conditions for the Norwegian State Housing Bank (Den norske Stats Husbank - “Husbanken”).  The examination was initiated by a complaint which alleged that the operating conditions for Husbanken involved an infringement of the EEA Agreement.

Husbanken is a state-owned financial institution established in 1946 by an act of the Norwegian Parliament to provide housing loans and loan guarantees against mortgage security.  The institution is currently authorised to grant loans, loan guarantees and grants for housing policy purposes.

The concerns of the complainant were in particular directed towards loans for new dwellings, which are provided without any means-testing of applicants. The complainant has submitted that owing to special framework conditions within which Husbanken operates, including annual subsidisation over the state budget and an effective “monopoly” on providing subsidised lending for housing purposes, Husbanken is shielded against competition from regular banks and mortgage companies.

In its examination of the case the Authority concluded that the financial relations between Husbanken and the Norwegian State Treasury involve financial advantages which are covered by  the first paragraph of Article 61 of the EEA Agreement.  Furthermore, the Authority considers that the arrangement does not qualify for any of the exemptions provided for under the second and third paragraphs of the same Article.

However, the Authority has at the same time examined the situation in relation to the provisions on public undertakings in Article 59 of the EEA Agreement.  The Authority does not in the present circumstances consider that restrictions or distortions of competition as a result of the framework conditions for Husbanken go beyond what is required to allow that undertaking to perform the services of general economic interest with which it has been entrusted.  This assessment, however, is based upon the prevailing legal and market situation and the Norwegian Government’s current policy as to the scope of Husbanken’s activities. 

In reaching this conclusion, the Authority has inter alia taken account of the following:

  • The Norwegian State has taken specific steps to assign particular services tasks to Husbanken intended to achieve objectives of its social housing policy;
  • Husbanken’s non-means tested housing loan scheme for new dwellings includes conditions, e.g. on building costs, size and quality standards of dwellings.  These conditions, intended to achieve housing policy objectives, impose monitoring obligations on Husbanken and also constraints on the recipients of its loans;
  • Husbanken is charged with providing a universal financing service on affordable and equal terms to all Norwegian households irrespective of their economic situation and creditworthiness, and of the geographical location of the dwelling;
  • Husbanken is not a credit institution in the meaning of the EEA banking legislation and does not compete with regular operators in the financial market outside the scope of its core activity in housing finance;
  • The framework conditions for Husbanken do not constitute a monopoly on housing finance, as there are no mandatory exclusive rights reserved for Husbanken to provide housing loans;
  • Although the financial advantages enjoyed by Husbanken may potentially affect trade between Contracting Parties to the EEA Agreement, in practice such trade effects are likely to be limited, inter alia as the secondary banking legislation of the EEA Agreement does not extend to financial institutions similar to Husbanken;
  • In most EEA States governments intervene in housing and housing finance markets.  The form of the intervention varies from one country to another depending inter alia on the housing policy of the State concerned.  While in some countries the emphasis is on publicly supported housing finance, in other countries the support takes more the form of directly subsidised rented housing.  The Norwegian housing market is characterised by a particularly high proportion of owner-occupied dwellings, and the emphasis of the Norwegian authorities is on a broad public housing finance system.  Overall government support for residential housing in Norway is nevertheless relatively modest.

For further information please contact Amund Utne (Competition and State Aid Directorate) on tel. 286.18.50 or Gudlaugur Stefansson on tel. 286.18.52.

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