France, Belgium, Luxembourg agree on Dexia plan

BRUSSELS (AP) -- The governments of France, Belgium and Luxembourg said Sunday they had approved a plan for the future of embattled bank Dexia, but they offered no details.

In a three-sentence statement issued by the Belgian prime minister's office, they said they supported a proposal by the bank's management that will be submitted to its board of directors. The board is scheduled to hold a crisis meeting Sunday afternoon in Brussels amid reports that the bank might be split up.

A bank spokesman said a news conference was expected Sunday evening or Monday morning.

The government statement said the ``suggested solution'' had been ``the result of intense consultations with all partners involved'' -- which would include the three countries. France and Belgium became part owners of the bank during a (euro) 6 billion ($7.8 billion) 2008 bailout. They have promised to ensure that no Dexia depositors lose money. Luxembourg holds a smaller stake.

The terse government statement followed a meeting in Brussels attended by Belgium's caretaker prime minister, Yves Leterme, French Prime Minister Francois Fillon, and Luxembourg Finance Minister Luc Frieden.

After Dexia's shares plunged last week amid fears it could go bankrupt, the French and Belgian governments stepped in and guaranteed its financing and deposits. The bank said in a statement Friday that trading in its shares would remain frozen until it could ``communicate more precisely on the various choices and options concerning the future of the group.''

The bank has significant exposure to Greek debt, and there are fears Greece may default in some fashion.

Finding a solution is particularly urgent for Belgium because on Friday Moody's Investors Service placed the country's Aa1 rating on review for possible downgrade, due in part to the expected expense of guaranteeing that Dexia's depositors will lose no money.