The European Commission temporarily approved a Belgian plan to provide 3.5 billion euros (4.9 billion U.S. dollars) for recapitalization of the country's troubled bank KBC.
The European Union (EU)'s executive arm said the Belgian recapitalization plan is in line with its rules on state aid during the current financial crisis.
Meanwhile, the commission also granted temporary clearance to an impaired asset relief plan, under which the Belgian government will cover KBC's losses from securitized investments over certain value.
Both measures were approved for six months on condition that Belgium submits to the commission an in-depth restructuring plan for KBC within three months.
"The KBC decision shows once more the commission's willingness to endorse appropriate solutions to the current financial crisis, whilst ensuring respect for the EU's state aid rules so as to minimize potential distortions of competition. These measures willstreng then trust in the solidity of KBC, a systematically important bank," said EU Competition Commissioner Neelie Kroes.
"Given that KBC has now received a number of significant aid measures, Belgium must submit, within the next three months, an up-dated restructuring plan that takes into account both recent measures," she added.
Source:Xinhua
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