The European Commission says it will not bend the rules when it judges huge capital injections by governments into European banks and other institutions that are suffering the backlash of the US financial meltdown.
The European Commission will apply EU subsidies and fair play rules for businesses "quickly and responsibly,'' EU spokesman Johannes Laitenberger said yesterday.
Over the weekend, EU antitrust chief Neelie Kroes actively helped the Dutch, Belgian and Luxembourg governments in crafting a euro 11.2 billion ($20 billion) bailout deal for Fortis NV to make the Belgo-Dutch bank smaller but financially stable.
"Everyone is working hand in hand'' to contain the damage, Laitenberger said. "The objective is to stabilise situations as they come up.''
EU rules on subsidies and fair competition let governments take a stake in private companies on conditions that are the same for commercial bidders. Their general goal is to produce better-run, more competitive companies.
Laitenberger said the EU will review Britain's nationalisation of mortgage lender Bradford & Bingley at a cost of 50 billion pounds to help preserve the country's financial stability. It is still examining Britain's rescue of another mortgage bank, Northern Rock.
In Germany, Hypo Real Estate Holding, the country's No 2 commercial property lender, also sought a bailout. No amount was disclosed but Kerstin Vitvar, an analyst with UniCredit, said it could be as much as 30 billion euro ($53 billion).
The EU head office said it had not been notified of the turmoil at the Munich-based company.
AP
