Commission approves rescue plan for Dexia
20 November 2008
The Commission approved the joint state guarantee provided by Belgium, France and Luxembourg for the Dexia financial group following the crisis in the Belgian financial market.
The Commission approved the state guarantee for the Dexia financial group following the crisis in the Belgian financial market. The aid, to be provided jointly by Belgium, France and Luxembourg, is to be granted to ensure the group's survival, to restore investor confidence and to encourage inter-bank lending.
On 9 October Belgium, France and Luxembourg concluded an agreement on a joint guarantee mechanism – covered 60.5% by Belgium, 36.5% by France and 3% by Luxembourg – to facilitate Dexia's access to financing.
Under the combined impact of several factors, the collapse of the bank would have had a snowball effect on the Belgian banking sector and, consequently, on the entire Belgian economy.
This decision does not cover the capital increase of €6.4 billion, of which Belgian and French investors subscribed €3 billion in each case and Luxembourg investors €376 million, following a decision taken by Dexia's Board of Directors on 30 September 2008, with a view to countering the impact of the financial crisis on Dexia. Furthermore, it does not cover the guarantee announced on 14 November 2008 in the context of the sale of FSA, Dexia's US subsidiary.
The authorisation is limited to a period of six months. If the crisis continues, this period may be extended at the duly justified request of the Member States concerned.
Press release
© European Commission
