REFILE-EU clears ING restructuring, illiquid facility

(Refiles to correct typographical error in paragraph two)

BRUSSELS Nov 18 (Reuters) - The European Commission on Wednesday approved a restructuring plan and a state-guaranteed illiquid asset back-up facility provided by the Dutch government to ING (ING.AS) banking and financial services group.

The Commission, competition watchdog of the 27-nation European Union, said in a statement it had approved the plan following an additional agreement between ING and the Dutch government.

"ING will pay a significant proportion of the restructuring costs, ING's long term commercial viability will be restored, and the aid will not lead to undue distortions of competition," the EU's executive arm said.

The restructuring plan will see ING reduce its risk profile and the complexity of its operations. It will also sell its insurance activities and its Westland Utrecht Hypotheekbank business unit, the Commission said.

"The restructuring plan is adequate to restore ING's viability, ING is financing a significant share of the restructuring costs and distortions of competition caused by the aid measures are sufficiently addressed," EU Competition Commissioner Neelie Kroes said in the statement.

(Reporting by Bate Felix)