Belgium has told France that it is not willing to foot the whole bill for rescuing Dexia.
That warning – from Belgian caretaker Prime Minister Yves Leterme and Finance Minister Didier Reynders – came as the two states prepared to start talks to divide the Franco-Belgian lender’s assets.
Dexia is to be broken up as a restructuring after Belgium and France guaranteed its financing in the face of a dramatic share-price slide.
Asked what Belgium wanted from France, Leterme told RTL radio that Belgium wanted a fair sharing of the burden: “It is clear that this is a very sensitive and crucial part of the negotiations — an equitable split of the costs,.”
The French finance ministry did not immediately reply to requests for a reaction.
Reynders said Belgium did not want the full cost burden of saving, and possibly nationalising, Dexia’s Belgian banking arm as well as supporting a ‘bad bank’ of assets left over from Dexia Group’s past business.
“We do not wish to end up holding the whole of Dexia Group,” he told reporters as he arrived for a meeting of core members of Belgium’s government. “We need a solution that means we are not just financing the Belgian bank. We also need to finance the past. And we do not want to do that alone.”
Belgium is probably mindful of the rescue of Dutch-Belgian bank Fortis three years ago when, within a week of a capital injection, the Dutch abruptly nationalised its part of the bank, leaving Belgium to clear up the remaining mess.