Clifford Chance

Clifford Chance Assists Belgian government in securing state aid clearance for Dexia

After more than a year of negotiations with the European Commission, the Clifford Chance competition team in Brussels has been able to secure state aid clearance for the aid package granted to the Dexia group by Belgium, France and Luxemburg.  The successful closure of this procedure will now enable the orderly resolution of the residual Dexia group, the sale of its subsidiary DMA (Dexia Municipal Agency) and the restructuring of Belfius (formerly Dexia Banque Belgique).

The case has been extremely challenging for a number of reasons :

• It was the first state aid case resulting from the sovereign debt crisis involving more than one Member State.
• The investigation lasted close to 16 months and required a number of interventions on the part of the governments and the European Commission to ensure the bank continued its operations for the duration of the investigation.
• It was the first case which involved a complex set of remedies, including nationalisation (of Belfius), divestments (of Dexia Asset Management, Crediop, Denizbank, etc.), the set-up of a development bank (through Dexia Municipal Agency in France), the orderly resolution of the residual group and a set of behavioural commitments.
• The Clifford Chance team was also required to file a number of merger control notifications, both at the Belgian and EU level.   These had to be accompanied by request for derogation from the implementation prohibition in view of the urgency of the measures in question.

Partner Johan Ysewyn, who lead the team, commented: "This truly was the state aid investigation of the year and we were extremely honoured the Belgian State had the confidence in Clifford Chance to award us the mandate.  The outcome of the investigation shows that the Commission will impose severe measures for those banks who, after state aid injections during the first financial crisis, cannot remain viable without state support.   The Commission requires those banks, at a minimum, to refocus further on their core activities, and, at the extreme, can require those banks to go into a run-off scenario."

The Clifford Chance team was composed of antitrust lawyers Johan Ysewyn (partner, Brussels), Anastasios Tomtsis (counsel, Brussels), Frances Dethmers (counsel, Brussels), Melissa Van Schoorisse (associate, Brussels), Chloé Vander Velpen (associate, Brussels) and Frans Müller (associate, Amsterdam).

The French government was represented by Bredin Prat. Dexia was represented by Cleary Gottlieb Steen & Hamilton.