Policy Focus

EU predicts more bank bailouts

The EU has approved French and Dutch government bailouts for their financial sectors, saying there will be more such decisions to come.

Highlighting the slew of recent approvals the commission has been doling out to EU members fearing for their ailing banks, a spokesman for the executive said, “You may have noticed that we have been adopting quite a few of these decisions lately.

“It serves to underline that the commission is very hard at work in contact with member states to make sure the bank schemes do help to remedy problems arising from the financial crisis, but don’t make the situation worse by discriminating against credit institutions from other member states or giving the recipient banks an undue advantage.

“There will be more of these decisions coming.”

The commission says that both the French package to rescue its credit institutions, worth €265bn, and the Dutch one worth around €200bn, comply with guidelines it set down earlier this month on competition and state aid.

In the last week, the EU has given the nod to both Portugal and Sweden on bank guarantees, and says it is ready next week to make decisions on Spanish and Italian plans.

In a press conference on Friday, the commission also revealed that it has formally granted €6.5bn in financial assistance to Hungary, as well as boosting an EU fund from €12bn to €25bn for other countries in need of assistance - decision originally announced on Wednesday.

All this comes ahead of a special meeting of EU leaders on 7 November to discuss the turbulent economy, while on Monday, the commission will release its economic forecast for autumn.