Less muscle from Brussels?

28 January 2010 By George Hay Follow @gfhay

In midcrisis, the Dutch bancassurer took aid on punitive terms. Now it is asking for leniency. The Commission may not relent, but other rescued banks could be emboldened to fight against mandated asset sales. In calmer times, a new competition commissioner may be sympathetic.

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ING is to appeal against some of the elements of ING's restructuring plan negotiated with the European Commission at the end of October.

The Dutch bank is not contesting plans to offload its insurance business and its ING Direct operations in the United States. But both ING and the Dutch state will contest the way the European Commission has calculated how much state capital ING should pay back.

ING has already paid off half of the 10 billion euros it received in October 2008 from the Dutch government. However, under the original terms it had to pay a 50 percent premium if it repaid the funds within three years.

The premium has now been renegotiated with the Dutch government, and on the first tranche was only 500 million euros, or 10 percent. The Commission has recently advised ING that the 2 billion euro discount represents state aid that will need to be repaid on the second 5 billion euro tranche.

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