The Dutch State’s equity stake in ABN Amro has fallen below 50 percent, said Finance Minister Sigrid Kaag in a letter sent to the Tweede Kamer on Monday. Back in February, she indicated that the country still owned just over 56 percent of the financial institution, and that the State would gradually reduce its holdings to just under 50 percent.
It is not yet known how much this sell-off has yielded for the treasury, as it has not been fully completed. Kaag noted that although the proceeds will help reduce the national debt, it does not mean that the caretaker Cabinet will have more room to increase spending.
The Cabinet introduced its budget for 2024 earlier this month, which included about two billion euros to help make sure that poverty levels do not increase. However, members in the house of representative, the lower house of Parliament, were aggravated that the budget was so restrained.
They want another four billion euros added to the budget to protect purchasing power for lower and middle-income households. This includes an additional 1.7 percent increase in the minimum wage, 420 million euros to keep public transport fares in check, 200 million euros to keep energy taxes lower, and the elimination of the planned increase to motor fuel taxes in January.
The government’s ownership of ABN Amro shares was the result of the global financial crisis in 2008. The Belgian-Dutch firm Fortis had run into major difficulties at the time, partly due to their overpriced takeover of the Dutch branch of ABN Amro. The crisis exacerbated these problems, causing the stock price to suddenly fall sharply.
Wouter Bos was the minister of finance at the time. He and the Cabinet decided to pay out tens of billions of euros to save the Dutch pieces of the financial group. This included insurance activities, which were spun-off and listed on the stock exchange under the name ASR between 2016 and 2017.
In announcing plans to sell a portion of the State’s equity in the bank, Kaag said in February that many conditions have been met, such as financial stability. She relied upon advice from the NLFI, an independent body that manages the government’s interest in financial institutions. The organization said that month that the government’s goal should be to reduce the bank’s stake to just under 50 percent. Kaag said that was “a signal” that the government would follow the advice.
Kaag said that the plan to begin selling shares in ABN Amro actually started with the third Cabinet of Mark Rutte. She made those comments five months before Rutte’s fourth Cabinet fell. “The State of course entered into ABN Amro, not because we necessarily wanted to run a bank, but because it was about financial stability and security for many customers. It was at a time of crisis. The intention has always been to to be able to exit in phases at an appropriate time,” said Kaag. curacaochronicle.com