FAILED bank Dexia will be allowed to receive a €45bn (£37.5bn) refinancing guarantee from France, Belgium and Luxembourg, rather than the €90bn originally offered, the European Commission (EC) said yesterday.
The temporary guarantee covers bank refinancing measures with a maturity of up to three years, issued until May 2012.
Strict rules prohibiting state aid to private firms would usually ban such a guarantee, but the bank’s “systemic importance” justifies the support.
However, the three countries will have to present a liquidation plan in three months time in case Dexia proves not to be viable. The bank had already been recapitalised in a deal which the EC approved in February 2010, and its restructuring is due to be completed by the end of 2014.
Meanwhile Belgian investment firm Lynx Capital launched legal action against Dexia’s chief executive Pierre Mariani, claiming he mislead investors before the October bailout. Dexia was unavailable for comment.