Belgium is buying a subsidiary of the financially troubled Dexia bank, the first European bank heading towards possible collapse because of the debt crisis.
The government says it is paying $5.4 billion for Dexia's Belgian subsidiary. Members of Qatar's royal family have already said they would pay $1.4 billion to buy the bank's Luxembourg division. Dexia's board is negotiating the sale of its French local public-finance unit to two French state-owned financial institutions.
The French, Luxembourg and Belgian governments also say they would provide an additional $121 billion in funding guarantees for the bank for up to 10 years.
The three governments stepped in to sell off the healthy parts of the troubled bank, which was severely hurt by holding too much debt from Greece, Italy, and some local U.S. governments. Other banks increasingly were reluctant to loan money to Dexia, worried that it would collapse and they would not be repaid.
Belgian officials say the infusion of cash and loan guarantees that customer deposits at Dexia are secure.
Meanwhile, Greece said Monday it has concluded talks with international creditors who have been reviewing the country's austerity budget measures. Greece needs their approval as it seeks release of a new round of financing from its $159 billion bailout from last year. Greek Finance Minister Evangelos Venizelos said he expects the $11 billion segment to be released before the country runs out of cash next month so it can avoid a default on its international obligations.
European leaders have been hard-pressed to stay a step ahead of the spreading debt contagion, which has worried investors across the globe.
On Sunday, French President Nicolas Sarkozy and German Chancellor Angela Merkel met in Berlin and promised to soon produce a “global, lasting and quick response” to the European debt crisis.
The two leaders declined to give any details of their plans, which Mrs. Merkel says are still a work in progress. But Mr. Sarkozy says they include adding new funding for banks faced with losses.
U.S. President Barack Obama telephoned Mr. Sarkozy and British Prime Minister David Cameron Monday. The White House says all three agree on the need for decisive action to resolve Europe's debt crisis and assure a global economic recovery.
In Slovakia, lawmakers are struggling to reach agreement on whether to approve expansion of the eurozone's bailout fund to assist countries that need international aid.
Slovak Prime Minister Iveta Radicova threatened to resign if the measure is not approved in a vote set for Tuesday. Opponents say the country is too poor to guarantee a proposed $10 billion share of the proposed $589 billion fund.
All Eurozone countries but Malta and Slovakia have approved the expanded fund.