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Dexia in the doldrums as rescue is probed

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Dexia in the doldrums as rescue is probed

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The European Commission is to investigate Belgium’s part of the nationalisation of Dexia.

It will assess whether the four billion euros Belgium had paid as part of that process contains state aid and, if so, whether it complies with EU rules on restructuring support.

As that probe continues Belgium would have six months to produce a restructuring plan for Dexia Bank Belgium.

Dexia – facing bankruptcy – has agreed to the nationalisation of Dexia in the doldrums as rescue is probed The European Commission is to investigate Belgium’s part of the nationalisation of Dexia.

It will assess whether the four billion euros Belgium had paid as part of that process contains state aid and, if so, whether it complies with EU rules on restructuring support.

As that probe continues Belgium would have six months to produce a restructuring plan for Dexia Bank Belgium.

Dexia – facing bankruptcy – has agreed to the nationalisation of its Belgian business and the sell-off of certain assets in order to secure 90 billion euros in state guarantees.

The Commission would in particular assess whether a new restructuring plan for DBB would ensure a return to long-term viability, whether the burden of restructuring would be adequately shared by all involved and whether sufficient measures would be taken to compensate for distortions of competition

On Monday Dexia’s shares fell 16.7 percent due to uncertainty as to how the Franco-Belgium lender will be split up following its latest rescue and amid continued fears of bankruptcy.

In addition, the European Central Bank said on Friday that guarantees the Belgium government is to offer Dexia will have to be introduced sooner.

Its Belgian business and the sell-off of certain assets in order to secure 90 billion euros in state guarantees.

The Commission would in particular assess whether a new restructuring plan for DBB would ensure a return to long-term viability, whether the burden of restructuring would be adequately shared by all involved and whether sufficient measures would be taken to compensate for distortions of competition

On Monday Dexia’s shares fell 16.7 percent due to uncertainty as to how the Franco-Belgium lender will be split up following its latest rescue and amid continued fears of bankruptcy.

In addition, the European Central Bank said on Friday that guarantees the Belgium government is to offer Dexia will have to be introduced sooner.