Dexia chairman queries EU competition restrictions

12th October 2010, Comments 0 comments

The head of Belgian bank Dexia said on Tuesday that EU regulators had not treated private banks on an equal basis with state-owned entities over conditions for state aid during the financial crisis.

Dexia chairman Pierre Mariani said that European Commission constraints preventing Dexia from paying shareholders dividends or making acquisitions until the end of 2011 were "a bit paradoxal" compared to decisions by the commission on other matters.

"If I take our case, I see a certain number of measures supposed to compensate for distortions to competition introduced by state aid which are all the same a bit paradoxal," he told journalists after releasing new strategic forecasts.

He said the EU had ordered Dexia to cease certain activities, whereas in many European countries "our competitors are public actors, owned by states or local authorities, (which) benefit from public guarantees."

He cited the commission's handling of "national plans concerning a country's entire banking sector, for example France but also a certain number of other countries, in an apparent reference to Ireland, which had been granted authorisation without demanding any such behavioural conditions."

Mariani underlined that this was "curious" because some of the banks he was referring to "are active internationally and sometimes make acquisitions in neighbouring countries," and that Belgian state aid was agreed on a case-by-case basis.

This had skewed the Belgian market in favour of external competitors, he said, in an allusion to BNP Paribas of France, which took control of the banking arm of Fortis during the crisis.

Mariani said that Dexia was targeting earnings of about 1.8 billion euros (2.5 billion dollars) for 2014, with a push in fast-growing markets including Turkey.

In 2009, Dexia posted net profits of one billion euros, he added.

© 2010 AFP

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