Franco-Belgian bank Dexia is being officially nationalised.
Belgian newspaper De Tijd writes:
The federal government wants to become sole owner of Dexia Bank Belgium and Dexia Group’s subsidiaries before the end of the weekend. Thereafter, the regional governments can step into the capital structure. That is the direction the government is marching Prime Minister Yves Leterme said Friday afternoon during a meeting with some union representatives.
Meanwhile, Dexia’s board of directors will examine the possible dismantling of the group on Sunday and not on Saturday, as has been previously stated.
The federal plan involves the government capital remaining in place at the bank for several years.
The provinces that had opposed a takeover of the bank by the federal government, seem more or less to agree with that federal plan. [my translation]
Dutch paper de Staandard writes:
Our editors have learned from reliable sources that the regions and the federal government have now agreed that a nationalization of Dexia Bank will probably see the federal government retain ownership for several years,
Under current plans, the federal government will buy the bank this weekend, so that Monday the stock markets will open reassured. However, first an agreement must still to be found with the French government. In a second phase, the regions have the opportunity to participate in the capital of the bank.
These are credit events for the Belgian sovereign. Expect the ratings agencies to take note.