"Dutch revenge" in bank crisis draws Belgian ire

By Paul Taylor

BRUSSELS (Reuters) - The salvage of troubled financial group Fortis began as a model of brotherly cooperation among the Benelux countries at the heart of Europe, but is fast turning into an acrimonious divorce.

A week ago, the Belgian, Dutch and Luxembourg governments agreed to rescue the cross-border banking and financial services company by injecting 11.2 billion euros ($15.5 billion) in a partial nationalization of Fortis banks in the three countries.

The solution held for just five days and the Netherlands nationalized most of the group's Dutch units for 16.8 billion euros on Friday after depositors and lenders fled, leaving the Belgians and Luxembourgers groping for a solution for the rump.

Angry Belgian editorialists denounced "Dutch revenge," "Hold-up by Dutch authorities" and "How the Netherlands bought out Belgium for a pittance."

When Fortis joined forces with Royal Bank of Scotland and Spain's Banco Santander to buy ailing Dutch bank ABN AMRO last year, it sparked a rare burst of national pride in this linguistically divided country.

For once, smaller Belgium -- chronically split between its majority Dutch-speakers and minority French-speakers -- appeared to have bested the Netherlands, often resented as an overbearing northern neighbor.

That pride now lies in tatters as Prime Minister Yves Leterme's government struggles to save what remains of Belgium's biggest private sector employer, with millions of depositors and tens of thousands of jobs at stake.

LAUGHING

The Belgian business daily De Tijd captured a mood of anger and humiliation in an editorial, saying: "The Dutch snuck away on Friday without taking any shred of responsibility for the failed investments of Fortis. The English have the appropriate expression for it: they're laughing all the way to the bank."

The chairman of the VFB Flemish shareholders federation, Paul Huybrechts, felt the Dutch had got a great deal.

"The Dutch have really enriched themselves," he told Reuters on the sidelines of a VFB conference on Saturday.

Dutch Finance Minister Wouter Bos fanned Belgian resentment by telling journalists: "Many of the problems were hidden in the Belgian part of the Fortis group."

The Dutch had saved "healthy parts of the bank from possible contamination by parts that were less healthy," he said.

That prompted Belgium's Leterme to say on Sunday that Bos had "missed an opportunity to keep quiet."

Earlier in the week, Bos told the Dutch parliament that if he had known everything he now knew about the Fortis balance sheet, he might have taken a different decision.