Constitutional Court Declares Arco Guarantee Granted By Belgium Unconstitutional

On 15 June 2017, the Constitutional Court delivered a judgment on the guarantee scheme granted by Belgium to three financial cooperatives of the ARCO group.

In November 2011, the Belgian authorities had decided to grant to the 800,000 ARCO shareholders the same protection provided for savings deposits and life insurance, i.e., a protection of funds limited to € 100,000 per investor. In the event of default on the part of the ARCO cooperatives, the Belgian state would repay up to € 100,000 of the funds invested by natural persons in shares issued by the financial cooperatives. ARCO, one of the main shareholders of the Belgian-French Dexia Bank, was thus protected against the threat of flight by private investors from the three financial cooperatives.