Dutch in $14 Billion Rescue for SNS Reaal
The Netherlands has nationalized bank and insurance group SNS Reaal in a $14 billion rescue that highlights the fragility of European banks and the continued exposure of taxpayers five years after the financial crisis erupted.
The Dutch government said on Friday it had put together the 10-billion-euro package to prevent SNS Reaal's collapse under the weight of property loan losses and to shore up confidence in the financial system after a private investor-led rescue failed.
The move shows how, despite billions of euros of bailouts and regulators' attempts to clean up the industry, some European banks are struggling to recover from the 2008 financial crisis amid a weak economy, and how the region's debt-laden governments - and in turn taxpayers - remain on the hook.
That is likely to prompt an outcry from a Dutch public which has already suffered years of austerity.
"The bankers get more and more money, and the people at the bottom foot the bill," said Jan-Erik Lubbers, a pensioner, as he sheltered from the rain under a shop awning in The Hague.
The rescue will lead to a worsening in the Dutch budget deficit in 2013, already forecast to exceed European Union targets. That is particularly embarrassing for Finance Minister Jeroen Dijsselbloem, who only last month took over as head of the Eurogroup of euro zone countries, which are trying to put a sovereign debt crisis behind them.
Several other European banks are also struggling to free themselves from underperforming assets. French bank Credit Agricole announced over $5 billion of charges on Friday, a day after Deutsche Bank also unveiled big writedowns.