* Belgian PM says wants equitable split of rescue burden * Belgium doesn't wish to end up with whole Dexia group -FinMin * Investor found for Luxembourg unit * Belgium to nationalise Belgian unit - paper * Dexia shares suspended until Oct 10 (Adds details of share suspension) By Lionel Laurent and Philip Blenkinsop PARIS/BRUSSELS, Oct 6 (Reuters) - Belgium told France on Thursday that it was not willing to foot the whole bill for rescuing Dexia , as the two states started talks to divide up the Franco-Belgian lender's assets. Dexia, whose shares were suspended later on Thursday, confirmed its board would meet in Paris on Saturday to vote on a break-up plan after Belgium and France pledged to guarantee its financing in the face of a dramatic share-price slide. Belgian caretaker Prime Minister Yves Leterme told RTL radio that Belgium wanted a fair sharing of the burden. "It is clear that this is a very sensitive and crucial part of the negotiations -- an equitable split of the costs," said Leterme, when asked what Belgium wanted from France. The French finance ministry did not reply to requests for a reaction. Leterme's comments were echoed by Belgian finance minister Didier Reynders, who said Belgium did not want to bear the full cost of saving, and possibly nationalising, Dexia's Belgian banking arm as well as supporting a "bad bank" of assets left over from the Dexia Group's past business. "We do not wish to end up holding the whole of Dexia Group," he told reporters as he arrived for a meeting of core members of Belgium's government. "We need a solution that means we are not just financing the Belgian bank. We also need to finance the past. And we do not want to do that alone." When Dutch-Belgian bank Fortis was rescued three years ago the Dutch abruptly nationalised its part of the bank within a week of it getting a capital injection, leaving Belgium with the rest. Belgium provided 60 percent of the 150 billion euros ($200 billion) of state guarantees Dexia secured in 2008 to cover its borrowing. However, sources close to the negotiations between France and Belgium said the two might settle for a 50:50 split to cover the bad bank assets, as this might be the maximum Belgium could afford. INVESTOR FOUND FOR LUXEMBOURG UNIT Dexia said it had already started talks with an international investor about buying its Luxembourg arm, with some media reports suggesting the prospective buyer was Qatar which was set to pay 900 million euros. The Belgian markets regulator subsequently suspended trading in Dexia's shares, saying the group needed to provide details of the proposed Luxembourg sale. Dexia responded with a statement saying that the shares would remain suspended until Monday, October 10. France and Belgium are expected to finalise the rescue plan on Thursday or Friday so the board can proceed to a vote. The bank, which lends to thousands of French and Belgian towns, needs help because of its problems accessing wholesale funds, exacerbated by its exposure to Greece. A source familiar with the situation said Dexia's board might have to choose between French and Belgian options if the two sides cannot agree. Under the rescue plan France is leaning towards splitting off Dexia's French municipal funding arm and combining it with French state bank Caisse des Depots and the banking arm of France's post office, Banque Postale. Belgium would take care of the largely retail business Dexia Bank Belgium, possibly nationalising it. Business daily De Tijd said that was the route the government had chosen. A government spokesman declined to comment, but did say French and Belgian financial experts had begun talks, with finance ministers due to enter discussions later. The bad bank would hold 95 billion euros of bonds the group was planning to sell, including some sovereign debt of weaker euro zone periphery states, around 7 billion euros of assets backed by U.S. mortgages, open credit lines and Dexia's public lending arms in Italy and Spain. However, not everyone is happy with the plans. Trade union members of French post office La Poste said they opposed combining Banque Postale and CDC with part of Dexia. "Dexia is a caricature of the kind of damage wreaked by the race towards ever-greater financial profits by any means necessary, including foul ones such as the issuance of 'toxic loans' to local authorities," union CGT said in a statement. Before the suspension, shares in Dexia last traded down 17.2 percent at 0.845 euros. The STOXX 600 Europe banking sector index closed 4.2 percent higher. ($1=0.751 euros) (Additional reporting By Robert-Jan Bartunek in Brussels, Michele Sinner, Johanna Somers in Luxembourg, Sophie Sassard and Victoria Howley in London; Editing by Andrew Callus, Will Waterman, Greg Mahlich)UPDATE 7-
Belgium tells France it will not bear whole Dexia bill
Friday, 7 October 2011
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