23. 12. 09. - 13:00

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23. 12. 09. - 13:00

EC approves Hypo's nationalisation

By Lisa Chapman

The European Commission (EC) announced today (Weds) it had approved Austria’s nationalisation of Carinthian bank Hypo Group Alpe Adria (HGGA).

The EC added, however, that Hypo must provide it with a comprehensive restructuring plan by the end of March 2010 and its approval of the bank’s nationalisation would remain valid for six months to help repair the damage done to the Austrian economy.

The EC also ordered Hypo’s former majority owner, the BayernLB bank in Munich, Germany, to adjust its restructuring plan "to ensure it will be able to help rescue Hypo."

EU Competition Commissioner Neelie Kroes said: "I expect BayernLB and Hypo Group Alpe Adria to present convincing, sound restructuring plans that will enable them to meet serious challenges during the rescue process and that are in compliance with EU guidelines on assistance."

She added that the EC had approved Hypo’s rescue for six months since the bank was of "systematic importance to Austria and countries in southeast Europe. During that time, the EC will examine the details of the rescue process to find out whether new state assistance complies with EU guidelines and whether it is sufficient to guarantee Hypo’s profitability.

"The EC will determine whether Hypo’s former owners are sufficiently involved in its restructuring. The EC will also examine whether BayernLB’s restructuring plan will enable it to return to profitability and to take suitable measures to limit market distortions," she added.

The EC acted fast in this case, as Austria had presented a rescue plan for Hypo on 18 December in Brussels.

Austrian Times

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