Dutch Government Nationalizes Fortis, ABN Amro

October 5th, 2008 By: Michael van der Galien | Tags:
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Where the Dutch government announced early last week that it would invest more than 11 billion euros in Fortis, a major European bank, with Belgium and Luxembourg, its Prime Mister and Treasure Minister announced last Thursday evening that the government had decided to nationalize the bank and all its assets completely. This means that both Fortis and the ABN Amro will be nationalized by the Dutch government: the price, more than 16 million euros.

The announcement came two days after Treasure Secretary Wouter Bos angered and confused Parliament by saying that if he had known everything about Fortis’ balance before he decided to invest in the company, he may not have done so. Parliament responded, asking what was wrong. Bos instantly drew back, saying he did not mean to imply that something was terribly wrong.

And then the government decided to simply nationalize the major financial institution.

It seems that something about the balance of Fortis convinced the Dutch government that an 11 billion euros injection would not be suffice. Instead, a complete nationalization was, seemingly, called for.

At this moment, the Dutch government and other European governments are unwilling to consider a major, organized project to save the financial markets. Instead, they act on individual cases, deciding whether or not a specific financial institution has so much influence and power that it should be saved no matter what, or whether it can collapse without greatly damaging the economy.

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  1. David
    October 5th, 2008 at 21:27
    Reply | Quote | #1

    It looks like Germany has now followed Ireland and Greece in giving a guarantee to all deposits held in bank accounts.

    I know that this is primarily a confidence building exercise, but if any large bank collapsed it could end up as a complete disaster.

  2. Michael van der Galien, Editor-in-Chief
    October 5th, 2008 at 21:58
    Reply | Quote | #2

    Yes, we’ve got a post about that coming up a couple of hours from now.

    Glad to see you comment again by the way; you were gone for a while.

  3. Lucrèce
    October 5th, 2008 at 22:30
    Reply | Quote | #3

    These nationalizations constitute the posthumous revenge of François Mitterrand and other socialists ;-)

  4. David
    October 6th, 2008 at 18:47
    Reply | Quote | #4

    Thanks Michael.  I read your site nearly every day, but I don’t always have time to comment.

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