Brussels, 20th November 2008
The European Commission has approved, under EC Treaty state aid rules, the state guarantee mechanism 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 (see IP/08/1495). The aid is necessary to ensure the viability of Fortis Bank and thereby avoid a serious disturbance in the Belgian economy. The guarantee plan is limited in time and scope to the minimum necessary to restore the financing, requires an adequate guarantee fee and provides safeguards to minimise distortions of competition. It is therefore compatible with Article 87.3.b. of the EC Treaty. The decision does not cover the measures implemented in favour of Fortis Bank from 29 September to 6 October 2008 (capital injection and sale to BNP Paribas), which are assessed separately.
Competition Commissioner Neelie Kroes said: "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."
On 18 November 2008, the Belgian authorities notified a state guarantee aimed at tackling the liquidity problems of Fortis Bank, created by the drying up of the wholesale loans market and aggravated by the distrust in Fortis Bank resulting from its recent difficulties.
The Commission concluded that the state guarantee mechanism complies with the conditions laid down in its Communication on state aid for financial institutions in the context of the current global financial crisis (see IP/08/1495):
The non-confidential version of the decision will be made available under the case number N 574/2008 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.