EU Kroes: To Clear French, Austrian Bank Aid Plans
BRUSSELS -(Dow Jones)- The European Commission Monday cleared France's plan to recapitalize some of its better managed banks and said it will clear a separate plan by Austria shortly. The commission also expects that the German government will make some changes to its overall bank aid scheme, which will subsequently accommodate the financing the government wants to give to Commerzbank AG, E.U. antitrust commissioner Neelie Kroes said. (Foto: ddp)
Commerzbank is expecting an EUR8.2 billion capital injection and will pay interest of 8.5% and 5.5% in two coupons. German Finance Minister Peer Steinbrueck said last week the commission requires banks to pay 10% interest for state aid.
A spokesman for the German Finance Ministry, however, reiterated that Germany won't change the aid for Commerzbank.
"We don't believe that there is still the need for changes in the case of aid for Commerzbank and we expect a quick approval by Brussels," Finance Ministry spokesman Stefan Olbermann said. "The debate is part of an overall discussion of the Ecofin with Kroes regarding the rescue packages and this question will be addressed in this context."
The French plan to inject money into some of its banks, designed to boost lending to the country's businesses, is capped at EUR21 billion, the commission said. But the French government has said it will initially limit the aid at EUR10.5 billion, the commission added.
In October France pledged to use up to EUR40 billion to support its banking sector, mainly aimed at shoring up banks that were in trouble. This latest plan complements the initial bailout provisions, the commission said.
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(END) Dow Jones Newswires
