EU's Almunia wants France, Belgium to 'speed up' Dexia deal

(BRUSSELS) - EU Competition Commissioner Joaquin Almunia has called on France and Belgium to "speed up" negotiations over public guarantees behind a restructured Dexia bank.

Almunia told AFP in an interview that his European Union state-aid watchdog will give its green light "probably this week" to an extension on temporary approval for 55 billion euros ($71.5 billion) of guarantees needed to re-finance the group.

A previous extension runs out on September 30, but Dexia has asked for another four months.

"Given that we have not yet been able to reach a decision on the group's restructuring, we will have to prolong this authorisation," Almunia said.

First bailed out in 2008 at the height of the global financial crisis, Dexia could not cope with the turmoil of the eurozone debt quagmire and in October last year the governments of Belgium, France and Luxembourg stepped in to wind up the bank.

Once approval is given for a restructuring plan, the bank will benefit from a definitive green light for a total of 90 billion euros on guarantees from the three governments.

However, Almunia said that how this worked in practice needed to be firmed up now.

"We (have been) talking about this for too long," he said in the interview conducted on Monday.

He blamed in part the delay on previous Dexia management, which he said had tried to pass its responsibility onto the Commission.

And he said that a fundamental question which the Commission could not resolve was "the relative weight of state guarantees put up by Belgium, France and Luxembourg."

Belgium was understood at the time of the bank's collapse to be putting up the lion's share, 60.5 percent as against 36.5 percent from France and 3.0 percent from Luxembourg.

Belgium wants France to assume greater responsibility, but Almunia said that "each time I meet the respective ministers, I ask them 'when will we have an agreement? Please, speed up your thinking and your discussions'," he said of those talks.