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PR(00)11: The EFTA Surveillance Authority closes its examination of the Norwegian State Housing Bank


The EFTA Surveillance Authority has decided yesterday 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.


Husbanken is a state-owned financial institution whose main activity is to provide loans to individuals for building of houses. Loans for new dwellings are granted without any means testing as regards income, however, the dwellings have to fulfil certain objective criteria, related to cost limitation and size, as well as other functional or planning requirements. Husbanken also provides loans, inter alia, to nursery schools, sheltered housing, new nursing homes and other care facilities. It does not offer any other financial services and is not a credit institution in the sense of the EEA Agreement.

Background of the case

The case was initiated in 1995 by a complaint, which requested the EFTA Surveillance Authority to assess whether the framework conditions for Husbanken were in conformity with, in particular, the State aid provisions of the EEA Agreement.

On 9 July 1997, the Authority adopted a Decision with respect to the complaint, concluding that, although the framework conditions for Husbanken were caught by the State aid provisions of the EEA Agreement they could, however, be exempted under Article 59(2) of the EEA Agreement.  According to that provision undertakings entrusted with the operation of services of general economic interest may, on certain conditions, be exempted from the competition and State aid rules. The Authority concluded that the conditions for the application of Article 59(2) of the EEA Agreement were met and, consequently, decided to close the complaint case without further action.

On 9 September 1997, the complainant lodged an application for annulment of this Decision with the EFTA Court. By a judgement of 3 March 1999, the EFTA Court annulled the Decision and held that the Authority had not sufficiently considered all the conditions necessary for the application of the derogation in Article 59(2) of the EEA Agreement. The EFTA Court, found, inter alia, that Husbanken provides services of general economic interest, but that the Authority did not sufficiently assess the effects of the “Husbanken system” on competition, trade and the interests of the Contracting Parties, as Article 59(2) requires.

Following the EFTA Court’s judgement, the Authority reviewed the case in light of the EFTA Court’s findings and, to this end, requested from the Norwegian authorities and the complainant certain information necessary to make a further assessment of these aspects.

The new Decision

After obtaining the information, the Authority decided to close the case without further action, since the “Husbanken system” can be exempted under Article 59(2) of the EEA Agreement. The Authority concluded in its new Decision, inter alia, that the compensation for the obligation of Husbanken to render the service of general economic interest is based on the costs, which are necessary to perform this specific service. The Authority found that there was not any form of over-compensation of costs, which are incurred by operating the current “Husbanken system”. Furthermore, the Authority concluded that the “Husbanken system” does not appear to be inappropriate for the realisation of the housing policy objectives and that there is a reasonable relationship between the aim and the means of the system. The Authority also concluded that particularly in light of the limited cross-border trade in this area and the current stage of the EEA market integration for housing mortgage loans, there are no indications suggesting that the “Husbanken system” affects the development of trade to an extent contrary to the interest of the Contracting Parties in the meaning of Article 59(2) of the EEA Agreement.

For further information please contact Mr. Amund Utne (Director of the Competition and State Aid Directorate) on 286.18.50 or Mr. Michael Sánchez Rydelski (Legal Officer in the Legal  & Executive Affairs Directorate) on 286.18.34.


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