Belgium, France, Luxembourg to cover Dexia loans

Belgium, France, Luxembourg to cover Dexia loans

Brussels: The governments of France, Belgium and Luxembourg say they are giving struggling lender Dexia SA a yearlong bank guarantee.

The guarantee follows three days when Dexia’s shares fell even after it received a $8.79 billion cash injection from the three governments last week.

Belgian Prime Minister Yves Leterme said the guarantee would cover all new agreements with international lenders, new interbank deposits and new institutional loans of up to three years.

Luc Frieden, the Luxembourg budget minister, said Thursday the deal shows Belgium, France and Luxembourg “have very firm support for Dexia." The French-Belgian bank specializes in lending to local governments.