In the News

After the break up, Dexia Group is still involved in financing the occupation

October 26, 2011
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On Sunday 9 October the Board of Directors of the Dexia Group voted to sell Dexia Bank Belgium to the Belgian government, and Dexia Municipal Agency to the French government. Terzake asked the question: "What about Dexia Israel?"

Watch the Terzake report on Dexia Israel here (in Dutch - TV).

The "Israel colonizes - Dexia finances" platform also asked itself the same question. Based on Dexia press releases, media coverage, contacts with journalists and with Moniek Delvou, communication adviser to Dexia Chairman Jean-Luc Dehaene, we were able to find out the following information.

The Dexia Group, with its head office in Place Rogier in Brussels, still exists. When people talk about the "bad bank", or the "residual bank", they are referring to the Dexia Group. The same Dexia Group that was first bailed out in 2008, partly by the various public authorities in Belgium, which together forked out 2 billion euros.

Dexia Group shares are currently valued at €0.76 (as at 13/10/2011 - 11.45 am). There are 1,948,948,474 shares in circulation, giving the Group a total value of about €1.48bn. The shareholding composition is unchanged. The Belgian shareholders are the Communal Holding (14.14%), the ARCO Group (13.81%), the Belgian Federal State (5.73%), the three Belgian Regions (5.73%), the Ethias Group (5.04%), Dexia employees (1.07%) and... the people who attended the Dexia AGM on 11 May 2011 to protest against Dexia Israel financing illegal Jewish settlements in occupied Palestinian territory.(1)

Two major changes in the Dexia Group

The Belgian government has bought Dexia Bank Belgium, the Belgian subsidiary of the Dexia Group, for 4 billion euros, in spite of the fact that the whole Group was worth less than 2 billion. The French government has purchased Dexia Municipal Agency from the Dexia Group for 650-700 million euros.

All other business units of the Dexia Group will remain where they are. Banks all over the world are involved: the Luxembourg "Dexia Banque Internationale à Luxembourg", the Turkish "DenizBank" and the Canadian "RBC Dexia Investor Services".

The French subsidiary Dexia Crédit Local (DCL) also features on this list. Through DCL, the Dexia Group controls banks in Slovakia, France, Italy, Ireland, the US, Germany, Poland, Spain and of course the Cayman Islands. After all, every self-respecting bank must have a subsidiary in some tax haven or other. It was also Dexia Crédit Local that controlled Dexia Municipal Agency until Sunday, the bank purchased by the French government.(2)

What about Dexia Israel?

As far as Dexia Israel is concerned, nothing has changed for the moment. Like many other banks, it is still part of the French arm of the Dexia Group, Dexia Crédit Local. This means that final responsibility and final decisions concerning everything Dexia Israel does still lie in Brussels. The various shareholders (see above), but also Chairman Jean-Luc Dehaene and CEO Pierre Mariani, are still responsible.

But there’s more. The Belgian Federal government not only controls 5.7% of the Dexia Group; it now also acts as guarantor against all that can go wrong in the Dexia Group. And that’s quite a lot, as the term "bad bank" might lead you to suspect. In total, Belgium is providing a guarantee worth no less than €54 billion of the total of €90 billion that the Belgian, French and Luxembourg governments are jointly pledging.

Chairman Jean-Luc Dehaene lied about Dexia Israel ... again

With all the fuss surrounding the Dexia Group, news about Dexia Israel emerges almost by accident. On Monday 10 October the Israeli English-language business website Globes published an article entitled "Dexia Israel likely to join dismantled bank's French arm".(3)

We’ve already explained exactly how things stand on that front, so it’s not true to say that Dexia Israel would no longer belong to the Dexia Group. There are, however, two other interesting points made in the article. The incorporation of Dexia Israel into the French arm of the dismantled Dexia Group is explained as follows:

"This is because of pro-Palestinian activists in Belgium who have protested against Dexia Israel's operations including building 'Jewish settlements in the West Bank' and that Dexia Israel is 'party to war crimes'."

It would seem that the "Israel colonizes – Dexia finances" campaign is having increasing influence, even in Israel.

A second and more important point is that we have uncovered yet another lie by Jean-Luc Dehaene, Chairman of the Dexia Group. In a letter dated 31 May 2010, he wrote to us as follows:

"Finally, you should be aware that Dexia Israel operates independently as regards granting finance: the loans extended by Dexia Israel do not draw upon the savings collected by the Group, but only upon the deposits of the Israeli local public administrations and Dexia Israel issuing corporate bonds on the Israeli capital market."(4)

But what do we read in the Globes article?

"Even so, rating agency Midroog Ltd sees uncertainty surrounding DCL's support for Dexia Israel. DCL is committed to trim the credit given to Dexia Israel, which has exceeded a NIS 760 million loan that was extended. This sum represents 15% of the bank's credit."

Dexia Crédit Local (DCL), which so far still belongs to the Dexia Group, has apparently granted credit to Dexia Israel of more than 760 million shekels (approx. 150 million euros). And Dexia Israel could get into trouble now that this credit is to be trimmed. So it is not true, as Dehaene claimed, that Dexia Israel would only draw upon "the deposits of the Israeli local public administrations and Dexia Israel issuing corporate bonds on the Israeli capital market." Dexia Israel does actually receive credit from the Dexia Group, via Dexia Crédit Local.

These loans were also financed with savings of Dexia Bank customers in Belgium, since the Dexia Group has no network of branches in France with private customers depositing their savings.

Full circle

So just to recap: the Belgian government, together with France and Luxembourg, rescued the Dexia Group for the first time in 2008. Savings in Belgian accounts will be used to absorb Dexia Crédit Local deficits. DCL extended credit worth 150 million euros to Dexia Israel, although Jean-Luc Dehaene explicitly denied this. This credit is to be trimmed, according to Globes, which could land Dexia Israel in trouble.

And then the Belgian government re-appears on the scene, not just as shareholder of the Dexia Group to which Dexia Israel belongs, but also acting as guarantor in its hour of need. In this way the Belgian government, savers and taxpayers risk paying twice for Dexia Israel – the first time through the extension of credit and then through a government guarantee – and hence for the financing of illegal Jewish settlements in occupied Palestinian territory.

The "Israel colonizes - Dexia finances" campaign therefore supports all those who want a bank that does not indulge in speculation and the financing of illegal Israeli settlements, but instead gives priority to serving people and communities.



1 - You can find the shareholding structure of the Dexia Group here:
2 - 2010 Annual Report, where you can find all the main subsidiaries and affiliates of the Dexia Group:
3 -
4 -

Written by: Mario Franssen - spokesperson for the 'Israel colonizes - Dexia finances'-campaign. Translation: Moira Bluer