Dexia, first victim of EU debt crisis
Dexia also had to be rescued in 2008 (file photo)
Dexia becomes the first bank to fall victim to the eurozone sovereign debt crisis as Belgium, France and Luxemburg agree on a deal to dismantle the European lender.

Dexia, first victim of EU debt crisis

Dexia, first victim of EU debt crisis Reviewed by مرتضی سرمدیان on Oct 9Rating:

The three-sentence statement issued by the Belgian prime minister’s office on Sunday, said, “The suggested solution, which is also the result of intense consultations with all partners involved, will be submitted to Dexia’s board of directors for approval.”

The short statement followed a meeting in Brussels attended by Belgium’s caretaker prime minister, Yves Leterme, French Prime Minister Francois Fillon, and Luxembourg Finance Minister Luc Frieden, the Associated Press reported.

France and Belgium became part owners of the bank during a six-billion-euro bailout in 2008, while Luxembourg holds a smaller stake.

Some investors view the response to Dexia’s woes as a test of the ability of European governments to take decisive action to rescue banks if the eurozone debt crisis worsens.

However, the need to recapitalize banks is emerging as another strain for European governments whose budgets are already stretched.

Belgium had a debt-to-gross domestic product ratio of 96.2 percent last year, lower only than Greece and Italy among eurozone members.

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