Press Release: State aid: Commission approves joint aid from Belgium, France and Luxembourg to rescue Dexia

In accordance with the state aid rules of the EC Treaty, the European Commission approved a state guarantee for the Dexia financial group following the crisis in the Belgian financial market. The aid, to be provided jointly by Belgium, France and Luxembourg, was to be granted to ensure the group's survival, to restore investor confidence and to encourage inter-bank lending. Given Dexia's size, market share and the prevailing financial crisis, the group's collapse would have given rise to a systemic risk. The Commission decided that the measure constituted an appropriate, necessary and proportionate means of remedying a serious disturbance in the Belgian economy and was, therefore, compatible with the EU rules on state aid (Article 87(3)(b) of the EC Treaty), as explained in the Communication on how these rules apply to banks in times of crisis. It approved the aid as an emergency rescue measure for a period of six months which may be extended if the crisis continues. The three Member States undertook to submit plans for the future of the group within six months of aid being provided for the first time.