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Business

EU okays nationalisation of Dexia's Belgian arm

Text by News Wires

Latest update : 2011-10-17

The European Commission on Monday gave temporary approval to Belgium's nationalisation of Dexia's Belgian unit, as part of a rescue plan. The dismantled Franco-Belgian bank is the first victim of the eurozone's financial crisis.

AFP - European competition authorities on Monday gave temporary approval to Belgium's nationalisation of Dexia's Belgian unit under a rescue plan of the Franco-Belgian banking group.

The European Commission gave the Belgian government six months to provide a new restructuring plan for Dexia Bank Belgium, saying it was too soon to determine if the 4.0-billion-euro acquisition complies with EU state aid rules.

"The Commission acknowledges that the measure is necessary to preserve financial stability," the European Union's executive arm said in a statement.

But the commission said it launched an in-depth investigation to "assess whether the acquisition price contains state aid, and if so, whether the aid complies with EU rules for restructuring aid."

France, Belgium and Luxembourg decided last week to dismantle Dexia, the first bank to succumb to Europe's debt crisis.

The three governments agreed to guarantee the bank to the amount of 90 billion euros, with 60.5 percent for Belgium, 36.5 percent for France and 3.0 percent for Luxembourg.

While Belgium is nationalising its unit, France has decided to create a new bank to finance local authorities. The Luxembourg unit is being sold to Qatari investors.

Date created : 2011-10-17

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