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EU regulators probes state aid for Fortis unit
Source: Agencies |
April 9, 2009, Thursday
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Print Edition
Print Edition
EUROPEAN Union regulators opened a probe yesterday into the Dutch government's bailout of Fortis' Netherlands banking arm to check the legality of a state loan and the price the country paid to buy ABN Amro bank.
Fortis, once the largest bank in Belgium and the Netherlands, was carved up in a joint government rescue last October after the debt-laden bank risked collapse when credit markets seized up.
The Netherlands took control of the bank's Dutch operations - Fortis Bank Nederland - and gave it tens of billions of euros in loans to pay off short-term debt to the Belgian parent company.
In December, the Dutch government paid FBN 6.5 billion euros for the Dutch bank ABN Amro that Fortis bought in 2007 for 24 billion euros (US$32 billion) as part of the largest takeover in banking history - a debt that Fortis could not pay off.
The European Commission said the Dutch did not seem to have followed guidelines for how governments can bail out banks without triggering competition problems.
It said a loan facility the Netherlands gave to FBN looks like a government subsidy as the amount and the loan's duration were not "limited to the minimum."
Fortis, once the largest bank in Belgium and the Netherlands, was carved up in a joint government rescue last October after the debt-laden bank risked collapse when credit markets seized up.
The Netherlands took control of the bank's Dutch operations - Fortis Bank Nederland - and gave it tens of billions of euros in loans to pay off short-term debt to the Belgian parent company.
In December, the Dutch government paid FBN 6.5 billion euros for the Dutch bank ABN Amro that Fortis bought in 2007 for 24 billion euros (US$32 billion) as part of the largest takeover in banking history - a debt that Fortis could not pay off.
The European Commission said the Dutch did not seem to have followed guidelines for how governments can bail out banks without triggering competition problems.
It said a loan facility the Netherlands gave to FBN looks like a government subsidy as the amount and the loan's duration were not "limited to the minimum."
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