The European Commission has opened an in-depth investigation concerning the compliance with EU State aid rules of State measures in favour of Fortis Bank Nederland (FBN) and ABN Amro.

The Dutch State purchased FBN and provided a large loan facility. The Commission now says that it has reason to believe that this aid may not fulfil the conditions laid down in its Communication on how EU State aid rules should be applied to banks during the current financial crisis. In particular, the Commission has expressed doubts that the amount and duration of the facility are limited to the minimum. Moreover, it has questioned whether the interest charged by the State is sufficient to avoid distortion of competition.

The purchase by the Dutch State of ABN activities from FBN for a price of EUR 6.5 billion will also form part of the Commission’s investigation. The transaction price may have been above the market value of these activities, thereby providing aid to FBN. It seems that this measure actually had the effect of a recapitalisation of FBN and the Commission has doubts as to whether the conditions for recapitalising banks have been fulfilled.

The opening of an in-depth investigation gives interested parties the opportunity to comment on the proposed measures. It does not in any way prejudge the outcome of the procedure.