EU clears state guarantees for Fortis, Dexia

BRUSSELS — European Union regulators on Thursday approved state guarantees given to Belgium's troubled lenders Fortis Bank and Dexia financial group.

The European Commission said the Belgian government's guarantees to help Fortis survive the financial crisis were in line with EU subsidy rules.

It granted similar clearance to guarantees for Dexia SA from authorities in Belgium, France and Luxembourg, who announced in October plans to give the lender a yearlong guarantee on its new loans and deposits.

The EU decision does not cover other measures to support Fortis, including a capital injection and its sale to France's BNP Paribas SA, which are being assessed separately by the EU regulators.

Government guarantees to Fortis were followed by decisions to break up the bank and sell off its core banking and insurance operations to the Dutch, Belgian and Luxembourg governments and BNP Paribas.

The EU has to check all state aid to ensure it complies with European competition laws. It has been working overtime in recent weeks to verify a slew of bailouts to banks hit by the global financial crisis.

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Associated Press

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