EU probes viability of Dexia bank restructuring

The Associated Press ~ staff The News
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BRUSSELS - The European Union said Friday it has started an in-depth probe into the restructuring of Dexia bank and whether it will yield a viable future for the ailing lender.
In a statement, the European Commission also approved emergency measures to keep the bank afloat during the financial crisis by authorizing the French and Belgian governments to provide euro13.22 billion (US$16.9 billion) in guarantees for the sale of the U.S. subsidiary FSA.
The wider restructuring plan includes a capital injection of euro6.4 billion ($8.18 billion) and euro150 billion ($192 billion) in guarantees from Belgium, France and Luxembourg.
Those measures had already been approved by the EU last November. Now it needs to see whether the plan to bring the bank back to prominence is viable.
"The Commission is required to check that the large amount of aid provided to Dexia is accompanied by realistic projects to address the problems that led to the current situation," said EU Competition Commissioner Neelie Kroes.

Organizations: European Union, Dexia bank, European Commission FSA Dexia

Geographic location: BRUSSELS, U.S., Belgium France Luxembourg

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