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Belgium proposes solution for financial cooperative Arco

Prime Minister Charles Michel has presented a formal proposal to the European Commission for the Arco file. The proposal has not been discussed in the government, reported De Tijd and L’Echo on Tuesday. Arco is a financial cooperative with about 800 000 shareholders and part of a Catholic workers organisation. In 2014, the European Commission ruled that Arco was the only financial cooperative that had made use of a Belgian guarantee scheme for shareholders.

The scheme aimed at protecting the shareholders from losses but had not got prior Commission approval for new state aid measures. The Commission concluded that it was incompatible with EU state aid rules and that Arco had to pay back the undue advantage it had received.

According to the new proposal, Belgium wants to conclude an arrangement with the shareholders in Arco. In exchange, all pending or future claims for damages should be dropped.

In the event of an agreement, the shareholders could count on receiving 600 million euros, which represents 40% of their investment.

The contribution of the institutional shareholders (Worker movement Beweging.net and Belfius Bank) would be limited to 60 million euros together. The main amount would be borne by the Belgian state.

The government is counting on a super dividend of 400 million euros to shareholders that Belfius would distribute before its public offering on the stock market.

The European Commission will have to consider whether this formula does not constitute state aid. The proposal has never been discussed in the government and formally approved by all coalition partners, said a source, and could be modified if necessary.

A previous attempt to arrive at an agreement was rejected by the Commission in 2011.

The Brussels Times

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