EU voices doubts over Germany's HRE bank after aid approval

24th September 2010, Comments 0 comments

Europe's top competition watchdog on Friday expressed "doubts" about the long-term viability of troubled German bank Hypo Real Estate, while granting temporary approval for ongoing state support.

"At this stage, I still have doubts about the long-term viability of HRE," European Union competition commissioner Joaquin Almunia said in a statement.

"Before adopting a final decision on the restructuring plan I will closely examine the long-term viability of the bank and the adequacy of the measures to limit distortions of competition and to ensure burden sharing."

Germany has bailed out HRE, badly hit by the global financial crisis, by covering the transfer of some 200 billion euros (264 billion dollars) of toxic and non-strategic assets into a winding-up institution and offering additional state guarantees of up to 40 billion euros.

The EU has cleared this support for the moment pending a further review of additional state aid for HRE.

© 2010 AFP

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