EU opens in-depth state-aid probe into Fortis' Dutch bank

(BRUSSELS) - The European Commission said on Wednesday it had launched an in-depth probe into the Dutch state's bailout of Fortis Bank Nederland last year on concerns the deal may have broken state aid rules.

The investigation covers the state's takeover of the Dutch banking arm of stricken financial services group Fortis last October and loans to it which the commission said amounted to "tens of billions of euros."

It also covers the Dutch state's takeover of the activities ABN Amro that Fortis had previously purchased, in a deal that saddled the Belgian-Dutch parent company with huge debts that contributed to its spectactular downfall.

Europe's top state aid watchdog voiced concerns that the bailout was carried out on terms that were not in line with EU rules that aim to prevent companies from gaining unfair state support over their rivals.

"The Dutch state was justified in intervening to prevent the bankruptcy of Fortis Bank Nederland, which would have caused a serious disturbance of the Dutch economy," EU Competition Commissioner Neelie Kroes said in a statement.

"However, the commission has to ensure that the rescue aid was limited to the minimum necessary and did not create undue distortions of competition liable to cause problems for banks in other member states," she added.