Proposition 53K1811

Projet de loi contenant le deuxième ajustement du Budget général des dépenses pour l'année budgétaire 2011.

General information ¶

Submitted by

CD&V Leterme Ⅱ

Submission date

Oct. 17, 2011

Official page

Visit

Status

Adopted

Requirement

Simple

Subjects

budget national budget

Voting ¶

Voted to adopt

Groen CD&V Vooruit Ecolo LE PS | SP ∉ Open Vld N-VA LDD MR

Voted to reject

VB

Contact form ¶

Do you have a question or request regarding this proposition? Select the most appropriate option for your request and I will get back to you shortly.

Discussion ¶

Oct. 27, 2011 | Plenary session (Chamber of representatives)

Full source

Mr Vandeput apologizes and refers to the written report.

This is the second adjustment of the 2011 budget, with €4 billion for Dexia. This is a very serious matter. We have discussed the special committee for a long time. This is about the fact that Belgium has interfered and invested in the bank.

It is important to know how a bank makes money. A bank makes money in four ways. First, it charges all kinds of costs, which we find too high, to the customers. Second, it calculates a margin on duration. One can, for example, bring money to the bank to invest it for a year. The bank can transfer that money and also leave it out to customers for a year. The margin is earned by the bank. Third, a bank can engage in trading activities. These trading activities can be small and large. A fourth way a bank makes money is through the transition result. The transition result is to move money from short to long term. If the interest rate curve is classic and small begins in the short term and grows in the long term, then you move the money from the short to the long term and thus the transition result. It means that money can make 1% in 1 month, but in 20 years it can make 4%.

In that context, Dexia had a ⁇ secure business model. It took short-term deposits within the people – savings books and so on – and outsourced them to local governments for a long-term, 20 or 30 years. Mr. Coene pointed out yesterday in the committee the incredible international distortion of Dexia. Over time, Dexia had nothing to do with the story of the Municipal Credit Belgium. It became another bank. There was a different corporate culture in that bank for ten years.

The corporate culture of Dexia has become different. In addition, the corporate culture in France was quite different from the safe Municipal Credit Culture. I have described the four ways a bank makes money. In France, a lot of work is being done on trading activities and transition results. Of course, such things go well for a while. It seems logical in itself that the Crédit communal has been taken into account. After all, many deposits were collected, resulting in a surplus of deposits. Crédit communal was somewhere compatible, because there were no deposits. It was a logical, business-economic decision. However, one must consider the relationship in which this has been done.

One can argue that the merger with Crédit communal was logical, but it is quite illogical that one then completely blown up the balance sheet. At the moment Lehman Brothers goes bankrupt, there is a sort of cash gap of 200 billion euros at Dexia Bank. From the secure Municipal Credit one shifts to another corporate culture and suddenly one finds that 200 billion euros have not been covered.

Particularly nefast is the fact that Dexia has raised its balance sheet even further between August 2007, when the crisis, according to Mr Coene, was already very clear, and October 2008. This, of course, opens up a lot of responsibilities for the supervisor. The clearer the statement of the representative of the National Bank, the more questions there are about supervision in Belgium. The supervisory authority says that it did not have the tools to keep the balance sheet small. This is one of the questions to be examined in our committee: did the supervisory authority have the means to intervene? When one sees how the balance sheet between August 2007, when it was already clear that we were stopping on a crisis, and October 2008 swelled, then, in my opinion, there was, in this regard, a great responsibility of the supervisory authority.

The government saves the bank for the first time. It is that or the bankruptcy of the bank. There are a lot of considerations behind. They chose not to let Dexia go bankrupt and that was a wise choice, even in 2008. Due to its international branches, Dexia was already a systemic bank, a kind of Lehman Brothers at European level. The government has held the same line as in the Fortis Dossier. She was guided by the principle that if one has the choice who to save, one chooses for the depository and the staff and not for the shareholders. This happened in 2008. The difference with the dossier-BNP Paribas is that in Dexia you will find a management and shareholders who want to add a little extra. These shareholders do so on their own responsibility and according to their own opinions, or so it should be.

In the second rescue, which precedes today, I notice that this line is being held. One chooses for the deposit holders and for the staff, but not for the shareholders, whoever they are, the Municipal Holding or any other shareholder. That is the consistency at all.

A special committee on Dexia is being set up, while some want another committee. This is a case of corporate governance. If I hear the statements of Mr. De Gucht and others, who say that they were in the board of directors and knew nothing of 45 billion interest swaps, then one has to do with a file of corporate governance. This means that one must also look internally at the bank what the board of directors knew and what was in those different divisions, what was hidden internationally at Dexia and how that information was transmitted upwards.

I have just asked the newly established special committee to appoint a French expert as well. The reason is that a lot has gone wrong in France. There is another corporate culture that is much more focused on obtaining a return on equity of 15 or 20%, so something completely different from what the Municipal Credit intended.

It would be interesting to also get in touch with the French, possibly with the committee that deals with the Dexiadossier, to examine how we can combine our information with the information of France.

Regarding the salvation itself, I would like to emphasize four points.

First, as far as the risks are concerned, there are still large-scale risks in Dexia Bank Belgium and we must be aware of them. In the public opinion it is shown that everything is in the residual bank and that the rest is cleaned out, but in my opinion there are still important risks in the Dexia Bank Belgium. In this context, for example, I think of the Greek bonds. It is euphemistically called a haircut of 50%, but that means that one can write off 50 % of those bonds. These are important risks.

There are risks in the bath bank. Mr. Coene says that the National Bank supports it in cash and that such an operation should go well, if you look at it on a 20-year term. I hope it will go well, but it should not surprise us if there will be some extra money needed for that rest bank in the long run.

Second, is the price of 4 billion reasonable? We are concerned about our debt ratio. For those who buy it is as always too much and for those who sell it is as always too little. We must compare the price with the amount of 10 billion euros that may have been needed to buy Dexia Belgium in 2008. Some wonder why the split scenario was not used at the time. The Belgians and the French had a mutual veto. It is interesting to estimate what the price had been in 2008 compared to 2011.

Third, experts estimate the profit generation of Dexia Bank Belgium at half a billion euros per year under normal conditions. If one can generate a cash flow of half a billion each year, then the purchase price of 4 billion euros is to be accounted for. It is of course also related to the risk. I read your thoughts. This includes the money that has already been spent. For the federal level, it is absolutely not those 4 billion.

Finally, Dexia Belgium has borrowed the famous amount of €26 billion to Dexia France. It is important to know that Dexia Belgium also did not have that money and had to borrow it. It is not because those 26 billion euros will come back to Belgium from France that Dexia then has 26 billion to provide loans. That amount of 26 billion will be used to finance own loans. We should not put all our hopes on this. That amount of 26 billion was important for the pricing of the 3.8 billion net net that Belgium spends.

I was very pleased that the N-VA in the committee also said that it was a good operation. This operation is important for depositors and staff. The people who have worked for it deserve all the credit.

Mr. Speaker, Mr. Minister of Budget, Mr. Secretary of State for Budget, at this slightly advanced hour, I would like to comment on the second budget adjustment.

To put it in the words of Mr. Leterme, before you stands a member of the House of Representatives, though not with the bet of a prime minister, but a member of the House, who in this politically unstable time makes an attempt to carry out his control function over the government in a serious way. You will agree with me that it is not obvious to have been working in a state of ongoing affairs for more than five hundred days.

Colleagues, this assembly of the people’s representation, this assembly of the representatives of the taxpayers, we as representatives of the people, must save Dexia from collapse for the second time in a period of three years. After the federal government and the western governments’ capital contribution of 1 billion euros in 2008 and despite the many recommendations of the 2008 Special Banking Commission on how to deal with the financial crisis and how the banks should organize themselves, some bankers have been hard-learned and the rapid economic growth has prompted them to re-enter the speculation tour, with all its consequences. That is why we are here again with the baked pears, that is why we are today with the rescue plan of the rescue plan.

This federal government in ongoing affairs asked Parliament a few months ago to move to war in Libya. This federal government in ongoing affairs has appointed a new Governor of the National Bank. On 9 October last year, this federal government in ongoing affairs decided to spend 4 billion euros of tax money on the purchase of a bank, which immediately increased the state debt by 4 billion euros, with which the state debt again goes towards 100%. With this, I would only like to point out how rigid the concept of current matters can be.

This federal government in ongoing affairs has not only nationalized Dexia Belgium with 4 billion euros of tax money, but has also secured 60% of the bad loans, worthless state bonds and rubbish loans that are in the so-called residual bank, all with a guarantee for such a sluggish 54 billion euros, approximately 15% of the gross domestic product.

At a time when hard-working people see hard-working Flamings smoke their acid earned money in smoke, the CEO of Dexia Holding makes great jewelry in top hotel Amigo and sleeps the pound packer Mariani at the expense of Dexia shareholders his worries away in a five-star hotel in the heart of Brussels for 1 000 euros per night.

As we go deeper and deeper into the Dexiadossier, we can only find that the interconnection between the new Dexia Bank Belgium and the so-called residual bank, with in it the liquidated Municipal Holding, the ARCO group and Ethias, has become a intertwined clutch.

Anyone who thinks that the new Dexia Bank Belgium is a single and therefore a separate entity will still have to wait until the end of 2012, before the bank is disconnected from the entire Dexia Holding. As we formulate more and more questions from the Parliament about the handling of the entire Dexia dossier, we find that there are fewer and fewer answers and that more and more walls and shots are being erected. I refer to the hearings we have already had. The hearing with Francis Vermeiren as chairman of the Board of Directors of the Municipal Holding in the Flemish Parliament was very enlightening. The hearing with Mr. Coene of the National Bank of Belgium and Mr. Servais of the supervisory body of the banks was also a discouraging story. Even then, the bottom stone has not yet come up. In response to the many questions, both gentlemen too easily hide behind their professional secrets, which requires us to continue to demand that a parliamentary investigation committee be established. Colleagues, this is absolutely necessary to break the Belgian us-know-ons system open.

As far as Dexia Bank Belgium is concerned, as we go deeper into the small letters, it is clear from the sale agreement that the financing by the Belgian bank of the French Dexia activities will continue to be ⁇ ined in an initial phase. Depending on the source, there are at least EUR 25 billion to EUR 40 billion in Belgian deposits, which are used to finance Dexia Crédit local, which itself does not have a deposit base. It is intended that the intra-group financing will be gradually reduced, but the cash flow will not stop completely until the French can adequately finance themselves. Until then, Dexia Bank Belgium holds the French branch right.

Of the historical bond portfolio in default of Dexia NV, after the dissolution, 20 billion euros are still held by Dexia Bank Belgium. Of these, 1.4 billion have the status of non-investment grade, which can almost ⁇ be described as rubbish credit. Dexia Bank Belgium holds as much as 9.4 billion in government bonds from the so-called PIIGS countries, Portugal, Ireland, Italy, Greece and Spain. For the sale of Dexia Bank Belgium, the holding company Dexia NV was exposed to PIIGS bonds for 21 billion euros, after the sale, that figure has fallen to just over 12 billion. That’s good news for the Dexia Holding or that which remains in the so-called residual bank, but something less good news for the fresh state bank. Dexia Bank is the “lucky” owner of €1.64 billion in Greek government bonds. As a result of the decisions of the Euro Summit tonight, banks are also asked to record 50% of the value of Greek government bonds as losses in their accounts and thus in their books.

Although Greek government bonds have already dropped significantly in value in recent months, by recording the loss now in their accounts, that loss must also be deducted.

As far as I am aware, the loss for the Greek government bonds for Dexia Bank Belgium would represent a loss of approximately EUR 475 million, thus again a solid loss point.

Dexia Bank Belgium also holds a large package of Italian government bonds, up to €5.5 billion, which represents 40% of the Italian government securities that the group previously held in portfolio. We are very curious about what will happen with all this.

Colleagues, the story of colleague Bogaert as it should be possible annually to get a profit of 500 million euros from Dexia Bank, is a story that can be counted to the fables.

Also the liquidation of the Municipal Holding will not be without consequences for Dexia Bank Belgium, which means that it must immediately collect a loss of 1.6 billion.

Colleagues, the Flemish Interest will not be seduced and will not be trapped under the motto that we can only approve the text. The Flemish Interest Group will not approve the second budget adjustment, because it is primarily the Flemish taxpayers, who must respond to the greatness madness and greed of the bankers, who have still learned nothing from the 2008 banking crisis.

Moreover, the whole Dexia affair demonstrates once again that the banking system and banking practices in this country, with its pervasive political interconnection, continually lead to mispolicy and that the invoice for the entire knock-out telkenmale ends in the womb of the unconscious taxpayer.

That cannot be the intention. Moreover, we cannot accept this. That is also why the Flemish Interest Group will vote against.

Four billion euros – Mr. Bogaert has already mentioned – is not the actual price we have paid. We have already done a rescue in 2008 and many billions of those billions have since evaporated.

Is this bank worth the price? of course . There was no other option. The savers are now safe.

Allow me to ask a clear question to the managers about the future of this bank. Will we wait for Europe or will we finally implement some ethical principles regarding risk reduction, bonus and dividend policies, hybrid capital, leverage, speculation and so on?

I suggest that we do not lose another year, but that you work on it. I am very interested in the proposals you now have as the current owner and governor of the bank.