‘Government was too fast in pledging support to KLM’

The Dutch State stated prematurely that KLM would receive State aid. As a result, the government gained a worse negotiating position in discussions with banks about the future of the aviation group.

This is stated in a report from the Court of Auditors. He checked whether the government has acted correctly in helping companies. On 24 April, the Ministry of Finance announced that there would be 2 to 4 billion euros of support, while negotiations with banks had to start at that time.

Officials wrote to the Minister of Finance in an internal paper at the end of May: โ€œNegotiation with the banks is difficult because they are in a rather generous position. They assume that the aid will be given by the Dutch State anyway.โ€ The outcome of the talks is that the State now bears 93 percent of the risk of the aid operation.

Conflict of Interest

In general, the tone of the report is positive. Lessons have been drawn from past mistakes, but there are also criticisms. For example, the government had appointed ABN Amro as an advisor for State aid to KLM, while the bank was also involved in the negotiations. As a result, there may be a conflict of interest.

The Cabinet points out a response to internal procedures in the bank to avoid conflicts of interest and claims to rely on them.

Researchers also call it striking that KLM was not asked for a rescue plan beforehand and KLM did not come up with it. Other companies did come up with such plans with their application. โ€œThe role and responsibility for the survival of KLM shifted from the entrepreneur to the state.โ€

HEMA

Four companies have received individual support for more than โ‚ฌ3.5 billion: KLM, Royal IHC, SMART Photonics and Stichting Garantiefonds Reisgelden (SGR). The Dutch State rejected requests for aid from railway company NS, groundhandling operators, airports and department store HEMA.

In the case of the NS, the government has established a general scheme for public transport companies. The government is still talking about possible support next year. Baggage handlers requested earlier claim to the NOW regime, but that request was rejected.

HEMA also knocked to the government this year. Initially, Economic Affairs officials considered that doing nothing was not an option, but later an external consultant concluded that bankruptcy was unlikely. At that time, the Ministry wanted to waive aid, but in the end HEMA withdrew the application for aid following an agreement with the creditors.