France and Belgium agree fresh cash injection for Dexia

France and Belgium have agreed to inject 5.5 billion euros into Dexia, after the lender made another substantial loss.

The two states pumped 6.4 billion euros into the company last year.

The prospect of another cash injection could well undermine efforts to rein in their deficits as euro zone budgets come under closer scrutiny.

Belgium will cough up 53 per cent of the total with France adding 2.59 billion euros.

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