Dexia rescue cost France 6.6 bn euros: auditor

18th July 2013, Comments 0 comments

The rescue of Franco-Belgian bank Dexia cost the French state 6.6 billion euros ($8.6 billion), the public auditor said on Thursday, adding that the bill could rise.

France and Belgium moved in to rescue the bank, a major lender to local governments, after the global financial crisis left it over-extended and unable to raise funding due to risky investments that had turned sour.

France's Cour des Comptes said the French state's direct losses from the bailout were 2.72 billion euros, with the rest absorbed by state lender Caisse des Depots.

It said it expected the cost to Belgium was "at least equivalent", but provided no details.

The auditor said there was also a "more than negligeable" risk that the bank, which is still being wound up, would need more state-backed recapitalisation.

The recapitalisation costs drove up public deficits in both France and Belgium, both of whom are struggling to meet EU-mandated budgeting rules.

© 2013 AFP

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