Franco-Belgian Bank Dexia Gets Taxpayer Bailout
The politicians are at it again; another insolvent bank is “rescued,” courtesy of the already indebted European taxpayers. This time it is Dexia that has been deemed “too big to fail.” The component of the bank that conducts retail transactions in Belgium will be nationalized, with a payment from public funds of 4 billion euros to the parent. Furthermore, Dexia will receive a 90 billion euro guarantee from the European politicians as a backstop against any further liquidity problems.
More bailouts for insolvent banks, and from French president Sarkozy and German chancellor Merkel more assurances that the “brilliant” eurozone politicians won’t let Greece go under, or the European monetary union, for that matter. Of course, Dexia is not the only European bank in deep distress. That is what the Greek debt crisis is really all about; how to avoid an implosion of much of Europe’s banking system due to bad Greek debt corroding the balance sheets of the continent’s banks. Stay tuned; more examples of incompetent European politicians charging to the rescue are on the way.
