The European Union's competition regulator has approved two state guarantees worth a combined €18 billion for German bank Hypo Real Estate Holding AG.
The government will grant one guarantee worth €8 billion on December 23rd, while the other, worth €10 billion, will be granted in the coming months if the bank needs urgent liquidity.
The Commission said the measures were an "appropriate means to remedy a serious disturbance in the German economy".
"These guarantees will help the bank to cover urgent liquidity needs," Competition Commissioner Neelie Kroes said in a statement today.
"These measures will be taken into account when the commission takes a final decision on the bank's restructuring plan."
The bank got a total of €102 billion in credit lines and debt guarantees from the German government and financial institutions to save it from collapse last year when its Depfa Bank Plc unit failed to get short-term funding. The commission said in November this year it would extend its state aid investigation into the bank's government financing arrangements.
Bloomberg