International financial situation – Situation of the Dexia Group - Communiqué issued by the Presidency of the Republic
Paris, 30 September 2008
At a 5 a.m. meeting this morning at the Elysée Place, President Sarkozy discussed with the Prime Minister, the Minister for the Economy, Industry and Employment, Governor of the Banque de France and Head of the French Trésor Directorate the situation of the Dexia group and economic policy. After negotiations with the Belgian and Luxembourg authorities, it has been decided that the French State will participate in the Dexia recapitalization plan alongside the Belgian and Luxembourg States, the Caisse des Dépôts et Consignations (1) and Dexia’s current institutional shareholders.
The plan consists in injecting €6 billion into Dexia’s reserved capital, of which a billion will be subscribed directly or indirectly by the French State. After this capital injection, the French State and Caisse des Dépots et Consignations will together hold more than 25% of the capital, which under Belgian law gives them a blocking minority. The Luxembourg State will also offer Dexia BIL in Luxembourg €376 million through a convertible loan.
This decision has been taken to guarantee the continuity of the financing of French local authorities, for whom Dexia Crédit Local is the main lender, and to contribute to the security and stability of the French and European financial systems, in line with President Sarkozy’s commitments. The parties pledge to come up with the measures needed to radically improve the group’s governance, particularly its management organs.
The Prime Minister will inform the Senate and National Assembly Finance Committees and, with the Minister for the Economy, Industry and Employment, explain the content of the agreement reached during the night./.
(1) State-owned financial institution which carries out public interest missions on behalf of French central, regional and local authorities