Benelux countries prop up ailing Fortis bank

Dutch-Belgian bank and insurance giant Fortis NV has been given a €11.2bn lifeline to avert insolvency as part of a wider bailout plan agreed to by Belgium, the Netherlands and Luxembourg.

Belgian Prime Minister Yves Leterme announced the deal after weekend talks between the three countries, EU and national banking officials.

The deal will force the bank, which has headquarters in both Brussels and the Dutch city of Utrecht, to sell its stake in Dutch bank ABN Amro, which it partially took over last year.

Belgium and the Netherlands will each pump in €4.5bn while Luxembourg will invest €2.5bn in the bank’s Luxembourg operations, also for a 49% stake.