European Commission Approves State Aid for Fortis

November 20, 2008

The European Commission approved on Thursday Belgian State guarantees intended to facilitate the financing of Fortis Bank.

“The Commission found the aid to be in line with its guidance communication on state aid to overcome the current financial crisis,” the European Union executive said in a statement.

“The aid is necessary to ensure the viability of Fortis Bank and thereby avoid a serious disturbance in the Belgian economy,” it said.

The Commission said the guarantee plan was limited in time and scope to the minimum necessary to restore the financing, required an adequate guarantee fee and provided safeguards to minimize distortions of competition.

“The state guarantee is necessary to restore the access of Fortis Bank to short- and medium-term wholesale funding. At the same time it is ring-fenced to avoid abuses,” Competition Commissioner Neelie Kroes said.

(Reporting by Jan Strupczewski, editing by Dale Hudson)

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