Bailout deal for Hypo

The German government and private banks have agreed to a new €50bn deal to bail out the country’s second largest commercial property lender Hypo Real Estate, the country’s finance ministry said tonight.

A ministry statement said the deal would add up to €15.5bn in credit to an earlier plan worth €34.9bn billion.

Under the original plan, the German government would have injected €26.6bn into Hypo Real Estate and banks would have provided the rest.

But that deal fell apart yesterday and German MPs and bankers spent today devising a more aggressive solution.

The statement says the plan will assure Hypo’s solvency and “strengthen the financial community of Germany in difficult times”.