(Brussels, BEL) - European competition authorities on Monday gave temporary approval to Belgium's nationalisation of Dexia's Belgian unit under a rescue plan of the Franco-Belgian banking group.
The European Commission gave the Belgian government six months to provide a new restructuring plan for Dexia Bank Belgium, saying it was too soon to determine if the 4.0-billion-euro acquisition complies with EU state aid rules.
"The Commission acknowledges that the measure is necessary to preserve financial stability," the European Union's executive arm said in a statement.
But the commission said it launched an in-depth investigation to "assess whether the acquisition price contains state aid, and if so, whether the aid complies with EU rules for restructuring aid."
The commission will want to see whether the restructuring plan 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."
France, Belgium and Luxembourg decided last week to dismantle Dexia, the first bank to succumb to Europe's debt crisis.
The three governments agreed to guarantee the bank to the amount of 90 billion euros, with 60.5 percent for Belgium, 36.5 percent for France and 3.0 percent for Luxembourg.
While Belgium is nationalising its unit, France has decided to create a new bank to finance local authorities. The Luxembourg unit is being sold to Qatari investors.
It was the second time in three years that the governments rescued Dexia.
