Belgian state seeks to 'strengthen position' in Dexia

7th October 2011, Comments 0 comments

Belgian finance minister Didier Reynders indicated Friday that his government is aiming to up its stake in failing bank Dexia.

"In the negotiations with our French partners, we are going to find ourselves putting up great guarantees, but also strengthening our position within Dexia bank in Belgium," Reynders told reporters after a cabinet meeting.

He did not spell out what exactly he meant by the government's "position," but said it would "take account of the state's concerns as a shareholder, but also those of the regions and other Belgian shareholders."

Reynders said it was too early to identify a preferred solution, after suggestions Belgium would look to nationalise the parts of the bank not broken off and sold, namely French, Luxembourg and some Turkish operations.

On Thursday, trading in shares on the Brussels exchange were suspended until Monday.

Shares plunged by 37 percent at one point on Tuesday before France and Belgium stepped in to offer guarantees to depositors and creditors.

Reynders was speaking as Standard & Poor's cut Dexia's rating by one notch on Friday to A-.

An extraordinary meeting of Dexia's board, on which the French and Belgian governments are represented, is set for Saturday. The bank was already rescued in 2008 due to the global financial crisis.

© 2011 AFP

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