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Business

Brussels to probe Dexia rescue plan

Latest update : 2009-03-13

The European Commission has started an indepth investigation into the Franco-Belgian bank Dexia's rescue plan. EU regulators are concerned about the group's longterm viability, despite a 6.4 billion euro cash injection.

AFP - European Union regulators announced Friday that they had launched a probe into the rescue of Franco-Belgian bank Dexia to find out whether it will ensure the group's future.

"The European Commission has started an in­depth investigation under (EU) state aid rules to establish whether the restructuring plan for the Dexia group will restore the group's long­term viability," a statement said.

Late last year, France, Belgium and Luxembourg injected 6.4 billion euros into Dexia and pledged to guarantee its borrowings on the markets as its shares plunged during the worst credit crisis in generations.

The commission, the EU's top competition watchdog, said its announcement would give the parties a chance to comment on the measures which remain valid while the probe is underway.

"The commission is required to check that the large amount of aid provided to Dexia is accompanied by realistic projects to address the problems that led to the current situation," EU Competition Commissioner Neelie Kroes said.

"We cannot reach a favourable conclusion at this stage on the plans submitted to us. We therefore have to study them in depth."
 

Date created : 2009-03-13

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