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EU Commission approves $7.3bn bailout package for Dexia bank

European Union regulators have granted $7.3bn bailout package for banking group Dexia. Further, France, Belgium and Luxembourg have agreed to offer €85bn refinancing guarantee, according to the bailout plan.

The financial aid will enable the lender to restructure its operations, which includes selling of its subsidiary DMA (Dexia Municipal Agency) and the restructuring of Belfius bank, the European Commission said.

"As foreseen by our rules, the approved plan ensures that the continued market presence of some parts of the Dexia group is truly justified, without artificially keeping alive a failed business model, and that competition distortions resulting from the aid received are minimised," EU Competition Commissioner Joaquin Almunia said in a statement.

"The approved plan ensures that the continued market presence of some parts of the Dexia group is truly justified, without artificially keeping alive a failed business model, and that competition distortions resulting from the aid received are minimised," Almunia added.

The Franco-Belgian bank had previously received two bailouts, first in 2008, to avert the global financial crisis, and another last year triggered by the eurozone debt crisis, when Belgium purchased its retail operations in the country for €4bn.

The EU has also allowed to merge Dexia’s French lending operations into a new enterprise with involvement from the French government, Caisse des Depots et Consignations (CDC) and the postal bank.