De ARCO-waarborgregeling is in strijd met de Grondwet
Today, the Constitutional Court ruled on the legality of the ARCO guarantee scheme. The Court is of the opinion that the law underlying the ARCO guarantee scheme is in violation of the Constitution.
The case was returned to the Belgian Constitutional Court after the European Court of Justice responded to the questions referred by the Constitutional Court regarding the compatibility of the ARCO scheme with European law on government guarantees of savings deposits and the rules on state aid.
Monard Law is representing the interests of a number of Dexia shareholders in the case. Monard Law was there at the start of the proceedings that have called into question the entire ARCO scheme.
Not a savings product
In the proceedings, the Belgian State and the Arco companies argued that investments in the ARCO shares were comparable to a savings product and therefore should be guaranteed by the government. The Court of Justice nullified this by arguing that the ARCO shares cannot be a savings product.
In one ground, the Constitutional Court concurs with the Court of Justice’s opinion and explicitly states that the Belgian state cannot equate the Arco shares with a classic savings product such as a savings deposit for which the savings guarantee scheme may be applied.
Prohibited state aid
At the same time, the Constitutional Court considers that the Belgian State’s guarantee scheme for the benefit of ARCO companies is a form of state aid which should have been notified to the European Commission. Because this notification never took place and there is no reasonable justification for this, the Constitutional Court considers that this non-notification also violates the Constitutional rules.
What is the result of this ruling?
The case now moves back to the Council of State. It is up to the Council of State to make the final judgement in this case on future of the guarantee scheme. The ruling of the Constitutional Court is binding on the Council of State when taking its final ruling.
The ruling of the Constitutional Court can be consulted at the website of the Court.