Brussels to probe state support for banks

Wednesday 08 April 2009

Europe's competition commissioner Neelie Kroes has launched an investigation into the Dutch government's takeover of ABN Amro and Fortis in the Netherlands.

The aim of the investigation is to find out if the takeovers break EU rules on state support for industry.

The Dutch government took over Fortis Nederland last year and gave it billions of euros to pay off short-term debts. Later the government bought ABN Amro's Dutch operations from Fortis.

Unfair advantage

The loan facility given to Fortis looks like state aid because there are doubts that the interest charged by the state is high enough to avoid giving the bank an unfair advantage over its rivals, officials told news agency AP.

In addition, the €6.5bn the Dutch government paid Fortis for ABN Amro may have been above the market price, AP quoted regulatory officials as saying.

Even though the Dutch government was right to take over Fortis, the Commission has to be sure that the rescue package did not go above the necessary minimum which could distort competition with other banks, the Telegraaf quoted Kroes as saying.

© DutchNews.nl

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