The Dutch state said too soon that KLM would receive state aid. As a result, the government had a worse negotiating position in the talks with banks about the future of the aviation group.
This is stated in a report from the Court of Auditors. They have checked whether the government has acted correctly in helping companies. On April 24, the Ministry of Finance announced that 2 to 4 billion euros in aid would be given, while negotiations with banks had yet to start.
At the end of May, officials wrote in an internal document to the Minister of Finance: “The negotiation with the banks is difficult, because they are in a fairly generous position. They assume that the support will be given by the Dutch state anyway.” The outcome of the talks is that the state now bears 93 percent of the risk of the support operation.
Conflict of interest
Overall, the tone of the report is positive. Lessons have been learned from past mistakes, but there are also points of criticism. For example, the government had appointed ABN Amro as an advisor for the state aid to KLM, while the bank was also involved in the negotiations. As a result, there may be a conflict of interest.
In a response to internal procedures at the bank, the government points out that it is intended to prevent conflicts of interest and that it has confidence in them.
Researchers also say it is striking that a rescue plan was not requested from KLM in advance and that KLM itself did not come up with this either. Other companies did come with such plans with their application. “The role and responsibility for KLM’s survival shifted from the entrepreneur to the state.”
HEMA
Four companies have received individual support for more than EUR 3.5 billion: KLM, Royal IHC, SMART Photonics and Stichting Garantiefonds Reisgelden (SGR). The Dutch state has rejected requests for support from the railway company NS, ground handlers, airports and HEMA department store.
At the Dutch Railways, the government has set up a general scheme for public transport companies. The government is still in talks about possible support next year. Baggage handlers made a request to be able to claim earlier under the NOW scheme, but that request was denied.
HEMA also approached the government this year. Initially, Economic Affairs officials believed that doing nothing was not an option, but later an outside adviser concluded that bankruptcy was unlikely. At the time, the ministry wanted to waive support, but HEMA eventually withdrew the request for assistance after an agreement with the creditors.
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