"If there are measures which represent state aid, we will act promptly," said the Commission's competition spokesperson.
The EU executive is still awaiting notification of the German and British rescues. The Hypo bail-out is supposed to cost €35 billion, of which at least €5 billion will be funded by the taxpayer. For its part, the UK government agreed to buy up to around €35 billion (£50 billion) of mortgages and loans held by B&B.
Regarding Fortis, the Commission was itself already involved in the early stages of the rescue due to the sheer size of the operation (which is set to cost Belgium €4.7 billion, the Netherlands €4 billion and Luxembourg €2.5 billion). Competition Commissioner Neelie Kroes was "in close contact" with national authorities over the weekend when the deal was arranged, according to her spokesperson.
European Central Bank (ECB) President Jean-Claude Trichet also participated in the meeting, which was exceptional for a commercial bank rescue and a sign of how serious the situation has become. Reflecting this, the ECB yesterday decided to pump an extra €120 billion into EU bank deposits to avert a liquidity crisis.
But despite the interventions, Fortis's shares continued to fall yesterday (29 September), losing almost 19% of their value.
What's more, stock exchanges continued to plunge across the globe, notably as news came in that the US House of Representatives had voted against a massive $700 billion US government rescue plan to save the American financial system from collapse (EurActiv 23/09/08).
More banks in Europe are expected to face the same fate as Fortis. Shares in the French-Belgian bank Dexia sank 30% yesterday. The Belgian government announced that it was ready to support the group as it did Fortis if necessary.
French President Nicolas Sarkozy also pledged to "guarantee the security" of French banks and called a meeting of bank and insurance bosses to discuss the situation. He will also host a meeting with Germany, Britain, Italy, the ECB's Trichet and eurozone chief and Luxembourg Prime Minister Jean-Claude Juncker before the end of the week to discuss the crisis. "We must not give way in the face of destabilisation. We have to support the banks," he stressed.
EU competition spokesperson Jonathan Todd gave assurances that there was "no reason to think that competition and state aid rules will not be respected" in such rescues and that participation by national governments in a company does not automatically involve state aid if shares are bought at the market price. But he warned that certain "accompanying measures", notably in the Fortis bail-out, might pose problems and are "under close scrutiny".
Using state aid to rescue a firm is not illegal per se but, according to EU rules, it can only last for six months and must be limited to the minimum required to guarantee the company's survival.
