Rescue package for Hypo Real Estate approved

Germany’s government and banks have agreed on the details of a 35-billion-euro rescue plan for embattled mortgage lender Hypo Real Estate hours after gaining European Union approval for the bailout.

Rescue package for Hypo Real Estate approved

Earlier this week, the German government and financial industry agreed on the massive cash injection for Hypo Real Estate but the deal was marked by wrangling about the amount to be shouldered by the country’s private and state-run banks. In addition to banks, Germany’s insurance industry is reportedly also involved in the bailout. Details of the bailout have not yet been released.

Hypo Real Estate, Germany’s second largest commercial property lender, became the first German blue-chip company to seek a government bailout. It ran into trouble mid-September as credit froze on international markets following the collapse of US lender Lehman Brothers.

Separately, the European Union on Thursday approved the rescue of the troubled Munich-based international real estate financier after it teetered on the verge of collapse last week. The European Commission said it had cleared the rescue package until April 2009.