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European Commission - Press release

State aid: Commission extends in-depth investigation into the orderly resolution plan of the Dexia group and temporarily approves prolongation of the refinancing guarantee to Dexia SA and DCL

Brussels, 31 May 2012 - The Commission has decided to extend its in-depth investigation procedure into Dexia SA and its subsidiary Dexia Crédit Local (DCL) in order to examine formally the orderly resolution plan of the Dexia group submitted by Belgium, France and Luxembourg on 21 and 22 March 2012. It has also invited the three Member States to comment on Arcofin's recapitalisation of Dexia SA in October 2008. Moreover, in a separate decision, the Commission has decided to approve a prolongation until 30 September 2012 of the €45 billion guarantee granted by the three Member States to Dexia SA and DCL to cover the group's refinancing needs.

The Commission had temporarily approved the temporary guarantee €45 billion on 21 December 2011 until 31 May 2011 subject to the submission by the Member States of a plan for the restructuring or the orderly resolution of the Dexia group (IP/11/1592). This plan was submitted to the Commission on 21 and 22 March 2012.

Extension of the investigation

The submitted plan relies on the assumption that the three Member States will provide further guarantees to cover refinancing measures to be issued until the end of 2021. The remuneration of the guarantees would be close to zero. The Commission has doubts whether such a remuneration level is compatible with State aid rules, in particular if aid is used for new loan production. The Commission will also assess whether the submitted plan is credible in view of the objective of an orderly resolution of the bank and whether the plan limits the distortions of competition to the minimum.

Under the submitted plan Dexia Municipal Agency ('DMA') would be sold as a going concern to the French State, to Caisse des Dépôts et Consignations and to La Banque Postale, and would continue its activities. The Commission considers at this stage that the sale process foreseen by the submitted plan would only be possible by virtue of the aid received by Dexia and a number of additional guarantees aimed at enabling the sale.

The Commission considers at this stage that the aid received by Dexia should not be used to allow the perpetuation of the failed business model of Dexia at the level of DMA. In particular, the Commission doubts that the continuation of the activities of DMA is less distortive of competition and less costly for the Member States than any other alternative.

In addition, contrary to the Commission's assessment in its decision of 26 February 2010, the Commission has found indications that Arcofin's contribution to the recapitalisation of Dexia in October 2008 may have entailed State aid. It therefore invited the Member States concerned to submit observations on Arcofin's contribution to the recapitalisation of Dexia.

The extension of an in-depth investigation gives interested third parties the possibility to submit comments on the resolution plan. Dexia Bank Belgium (renamed 'Belfius' in March 2012), on which an in-depth investigation was opened on 17 October 2011, is not the subject of today's decision.

Prolongation of the refinancing guarantee

In a separate decision taken today, the Commission temporarily approved until 30 September 2012 the prolongation of a guarantee of the three Member States covering new refinancing of Dexia SA and DCL. That guarantee, covering a maximum amount in principal of €45 billion, was initially approved on 21 December 2011 until 31 May 2012.

The temporary guarantee covers the bank refinancing measures with a maturity of a maximum of three years, for a maximum nominal value of €45 billion. It is extended, jointly and non-severally, by Belgium (60.5%), France (36.5%) and Luxembourg (3%). The purpose of the guarantee is to preserve the financial stability of the Member States concerned, given the systemic importance of Dexia SA, and to enable the bank to finalise its resolution plan in accordance with State aid rules until the Commission can take a final position on this plan.

The Commission, however, has doubts at this stage as to whether the temporary guarantee measure is compatible with the internal market, especially since the new aid comes in addition to the aid already approved as part of the restructuring plan authorised by the Commission on 26 February 2010 and to possible further State aid under the submitted resolution plan. The Commission will take a final decision on the temporary guarantee as part of its final assessment of the resolution plan.


Dexia group benefited from significant state support from France, Belgium and Luxembourg, in 2008/2009, in the form of a recapitalisation, guarantees on funding and a guarantee on impaired assets. That support was approved by the Commission by decision of 26 February 2010 in return for a restructuring plan to be concluded by the end of 2014 (see IP/10/201).

That initial restructuring plan enabled Dexia SA to enhance the stability of its financing sources and reduce its leverage and its portfolio of non-strategic assets. However, the bank fell behind with the implementation of that plan and the imbalance in its financing sources has worsened again since last summer.

Since then, the Member States concerned notified additional aid to Dexia group, via the sale of DBB to the Belgian State (see IP/11/1203), the sale of Dexia BIL (see IP/12/346) and additional State guarantees on new refinancing of Dexia SA and its subsidiary Dexia Crédit Local (DCL) (see IP/11/1592).

On 21 December 2011, the Commission decided to open an investigation procedure on the basis of Article 108(2) TFEU on the new set of restructuring aid of which the temporary guarantee measure is part; and required that the Member States concerned submit a restructuring or liquidation plan within three months. The Member States complied with that requirement on 21 and 22 March 2012, notifying the orderly resolution plan on which the Commission is opening the current investigation. In addition, on 25 May 2012, they requested an extension of the issuing period of the refinancing measures covered by their guarantee.

The non-confidential version of the two decisions will be made available under the case numbers SA.33760, SA.33764, SA.33763 and SA.26653 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

Contacts :

Antoine Colombani (+32 2 297 45 13)

Maria Madrid Pina (+32 2 295 45 30)

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