Brussels, 01/03/2010 (Agence Europe) - On Friday 26 February, the European Commission gave its conditional green light to state aid granted by France, Belgium and Luxembourg for the restructuring of the bank Dexia. "The restructuring plan for Dexia is consistent with Commission guidance and, at the end of the restructuring period, will lead Dexia to refocus on its core activities and restore its long-term viability, in particular thanks to more stable financial resources", said Commissioner for Competition Joaquín Almunia.
The Franco-Belgian bank Dexia, which narrowly avoided collapse in autumn 2008, announced in early February that it was to reduce its bottom line by 35% as part of the restructuring required by the European Commission to compensate for the state aid which allowed it to ride out the crisis. In order to fulfil the Commission's requirements, Dexia will, amongst other things, shed its public authority lending activities in Italy (Crediop), Spain (Sabadell) and Slovakia, and its insurance arm in Turkey. Dexia will also improve the stability, quality and maturity of its funding sources, whilst respecting a number of ratios, to be the subject of a six-monthly monitoring by the Commission. Dexia will also make an adequate own contribution to the restructuring costs by suspending dividend payments on cash equities and interest payments on instruments constituting own funds.
The Commission requires all European banks which receive support from the public authorities during the crisis to restructure, in order to guarantee that they will not need any additional support in the future. This is the case with Dexia, which survived the financial crisis only because the French, Belgian and Luxembourg states carried out a cash injection of €6.4 billion and guaranteed its debt to a level of €150 billion, a sum which has since been reduced to €100 billion. (L.C./transl.fl)