Keywords
Summary

Keywords

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1. Free movement of capital ° Restrictions ° Housing benefit requirement making grants to borrowers of an interest rate subsidy subject to their having taken out a loan with a credit institution established in the national territory ° Not permissible

(EC Treaty, Art. 67)

2. Freedom to provide services ° Restrictions ° Housing benefit requirement making the grant to borrowers of an interest rate subsidy subject to their having taken out a loan with a credit institution established in the national territory ° Justification on grounds of public interest or by the need to guarantee the integrity of the fiscal regime ° None

(EC Treaty, Arts 56 and 59)

Summary

1. It is not compatible with Article 67 of the Treaty for a Member State to make the grant of a housing benefit, in particular an interest rate subsidy, subject to the requirement that the loans intended to finance the construction, acquisition or improvement of the housing which is to benefit from the subsidy have been obtained from a credit institution approved in that Member State, which implies that it must be established there.

Such a requirement is liable to dissuade borrowers from approaching banks established in another Member State and therefore constitutes an obstacle to liberalized movement of capital, which include bank loans.

2. It is not compatible with Article 59 of the Treaty for a Member State to make the grant of a housing benefit, in particular an interest rate subsidy, subject to the requirement that the loans intended to finance the construction, acquisition or improvement of the housing which is to benefit from the subsidy have been obtained from a credit institution approved in that Member State, which implies that it must be established there.

That requirement leads in the case of services such as the provision of building loans by banks to discrimination against providers of such services established in other Member States, which is prohibited by that article and is not justified under the derogations authorized by Article 56 of the Treaty, which do not include economic aims, or by the need to maintain the integrity of the national fiscal regime, since there is no direct link between the grant of the interest rate subsidy to borrowers on the one hand and its financing by means of the profit tax on financial establishments on the other.