Brussels: explain state role in Fortis rescue

The European Commission has asked the Dutch and Luxembourg governments to explain their involvement in the rescue plan for financial services group Fortis, the Telegraaf reports on Tuesday.


The Belgian authorities are due to outline their role in the €11.2bn bail out on Tuesday.
The Dutch government paid €4bn for 49% of Fortis’ Dutch banking arm, but this is not considered state support because the shares were bought at the market price, the paper says.
A spokesman for European competition commissioner Neelie Kroes told the Financieele Dagblad that she did not intend to suspend rules on unfair state support. ‘Whenever state support is involved, we will look into it as a matter of urgency,’ he was quoted as saying.
Finance minister Wouter Bos said in tv interviews on Monday evening that the government would continue to rescue banks hit by the current credit crisis.
Emergency debate
Bos added however that the government will only intervene if the country’s economy is at risk and would not bail out small local institutions. ‘We will continue to do what the situation requires,’ he is quoted by the Telegraaf as saying.
The Dutch parliament is expected to hold an emergency debate on the rescue package on Tuesday evening, reports news agency ANP. Both Bos and prime minister Jan Peter Balkenende are expected to be present.
All eyes were on the Amsterdam stock exchange on Tuesday afternoon, which had sunk to just over 310 points – its lowest level in four years – in early trading. But the bourse had recovered by late morning and by mid afternoon, Fortis was the biggest gainer.

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