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BRUSSELS: The Belgian and French governments have agreed that former Belgian premier Jean-Luc Dehaene should become new chairman of troubled Dexia bank, with a BNP Paribas manager as CEO, Belgian leaders said Tuesday.
Joining Dehaene, who served as Belgian PM between 1992 and 1999, as Dexia CEO will be Frenchman Pierre Mariani, a 53-year-old senior BNP Paribas manager, Belgian Prime Minister Yves Leterme announced in the early hours of Tuesday following an emergency cabinet meeting.
On Monday Leterme held talks in Paris with French President Nicolas Sarkozy on the fate of the French-Belgian bank, whose shares have been plummeting.
"On the fundamentals of Dexia, there is nothing to fear, it's a temporary problem. We are determined to work together, the governments of Belgium and France, to deal with the problem," Sarkozy said in Paris.
The departure of bank chairman Pierre Richard and chief executive officer Axel Miller were among the conditions of a 6.4-billion-euro bailout package for Dexia, hastily put together by the French, Belgian and Luxembourg governments last week.
The capital injection, worth US$9.2 billion, was agreed as Dexia's share price plummeted.
Mariani and Dehaene are candidates "of the highest order," said Leterme.
Mariani was French budget minister in the 1990s and is a former head of Sarkozy's office.
"It's a strong sign of confidence for the market," he added.
The Belgian government called for the Dexia board to approve the appointments on Tuesday so that Mariani and Dehaene could assume their positions the same day.
Asked whether Dexia would eventually be broken up, Belgian Finance Minister Didier Reynders said that was up to shareholders to debate.
So far this year Dexia shares have lost nearly 60 per cent of their value, including over 20 per cent on Monday alone.
The Belgian and French governments are agreed on the nominations, Leterme told reporters after the cabinet meeting.
Dehaene, 68, is "proud and happy" and "very motivated" at the idea of assuming the post, the Belga news agency reported him saying.
Leterme stressed the former PM's experience with big international groups and his numerous contacts.
Dexia was founded in 1996 in a merger of France's Credit Local and Belgium's Credit Communal. While it specialises in local government finance, it also has 5.5 million individual clients in Belgium, Luxembourg, Slovakia and Turkey.
The Dexia appointments came after BNP Paribas took a controlling stake in troubled finance group Fortis, with the Belgian and Luxembourg governments as minority shareholders, in another bailout package.
- AFP/yb
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