Brussels, 26/07/2001 (Agence Europe) - The European Commission authorised the aid from the Land of Berlin in favour of the Bankgesellschaft Berlin AG (BGB), or around EUR 2 billion, due to the considerable losses felt by the company, especially in the real estate sector. BGB is a credit establishment whose main shareholder is the Land of Berlin, with 56.6%, the Norddeutsche Landesbank, with 20% and the Parion insurance group, with 7.5%. At the end of June, the Federal government had officially notified the Commission of the rescue aid including the statement of intention as well as the size of the planned capital injection. To assess the need for the capital injection, the Commission notably based itself on the an opinion that was handed to it by the BAKred (Federal Banking Supervisory Office) in which it specifies that the capital injection is the only solution allowing to maintain the bank afloat until the examination of the restructuring plan. With regards to the amount, the BAKred adds that the solvency ratio before the crisis, or 9.7%, must absolutely be re-established in order to regain market confidence and to ensure the bank's survival. This ratio fell to 8% due to the difficulties experienced by the bank. Basing itself on this opinion, the Commission authorised the planned amount to allow the bank to return to the solvency ratio that it had before the crisis, amount provisionally estimated at around EUR 2 billion. In the banking sector, capital injections are authorised in exceptional cases, as being rescue aids. The Commission authorised this aid under this heading on the formal undertakings of the Federal government to submit to it a complete restructuring plan for BGB within six months. The Commission will examin the restructuring plan when it is received and will open, if needs be, an investigation procedure. In the framework of this procedure, it will analyse the size of the aid needed to re-establish the long-term viability of the bank in questions and decide what are the compensatory measures needed to reduce to a minimum the distortions to competition. In case of a negative decision, it may order to (partial) reimbursement of the BGB capital to the Land.