Commission Temporarily Approves Rescue Aid For Dexia Bank


The European Commission has temporarily approved, under EU state aid rules, the nationalisation of Belgium’s second largest bank Dexia Bank Belgium (DBB) through its acquisition by the Belgian State for €4 billion to be paid to Dexia SA. The Commission acknowledges that the measure is necessary to preserve financial stability. However, at this stage, the Commission is not able to conclude whether the acquisition by the Belgian State complies with EU state aid rules. Belgium has six months to notify a new restructuring plan for the bank.

The Commission’s in-depth investigation will assess whether the acquisition price contains state aid, and if so, whether the aid complies with EU rules for restructuring aid. In particular, the Commission will assess whether the new restructuring plan to be submitted by the authorities will ensure the return to long-term viability of the entities continuing business activity, whether there would be adequate burden sharing by all involved of the restructuring costs and whether there would be sufficient measures taken to compensate for the distortions of competition.

Dexia SA benefitted from significant state support from France, Belgium and Luxembourg, in 2008/2009, in the form of recapitalisation, guarantees on funding and a guarantee on impaired assets. That support was approved by the Commission in February 2010 in return for a restructuring plan to be concluded by the end of 2014.

The implementation of the restructuring plan enabled Dexia SA to enhance the stability of its funding and to reduce its non-strategic assets and leveraging. But the implementation of the plan also encountered delays and the liquidity imbalances of Dexia SA have grown since last summer.

The acquisition by the Belgian State of DBB is an integral part of a restructuring package for Dexia SA envisaged by Belgium, France and Luxembourg, potentially involving state aid. The purchase of DBB cannot be isolated from the rest of the package, which needs to be assessed under state aid rules by the Commission before it is implemented.


Dexia SA is the result of a merger, in 1996, between France’s Crédit Local and Belgium’s Crédit Communal. Dexia SA is the parent holding company of a broader group comprising three operational subsidiaries located in France (Dexia Credit Local), Belgium (DBB) and Luxembourg (Dexia BIL). DBB is mainly active on the Belgian market and provides financing to households, enterprises, municipalities and collecting deposits.

The restructuring plan approved by the Commission in February 2010 aimed at focussing Dexia SA’s activities on the main markets and to reduce its risk profile and leveraging , as well as to rebalance its liquidity profile.

The support granted in 2008/2009 consisted of a recapitalisation of €6 billion – of which €5.2 billion were considered aid – by Belgium and France; a guarantee towards a portfolio of impaired assets whose aid value was estimated at €3.2 billion and a joint guarantee of a maximum of €135 billion by the three States towards the refinancing of the group, including a Belgian state guarantee towards emergency lending assistance by the national central bank.

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