EC could block Dutch state's loan guarantee agreement with ING

THEEUROPEAN Commission (EC) has prolonged its review of a &euro;22bn (&pound;19.5bn) loan portfolio guarantee between ING and the Dutch state, saying the government may have paid too much.<br /><br />ING and the Dutch state struck a deal in January, under which the government agreed to guarantee 80 per cent of a &euro;27.7bn portfolio of so-called Alt-A and sub-prime residential mortgage-backed securities. <br /><br />The government is due to receive 80 per cent of the cash generated from the portfolio, which it took on at a 10 per cent discount to par value. <br /><br />The EC gave the deal initial six-month approval in March while it conducted an investigation, but said in a statement yesterday that it &ldquo;continues to have doubts that the price... is justified&rdquo;.