Extra €10bn agreed to help Dexia France, Belgium and Luxembourg, which own Dexia, the lender that is being broken up, have agreed to boost state guarantees to the ailing bank by €10bn to €55bn, it was disclosed on Wednesday. The decision followed Monday's meeting between Pierre Moscovici, France's new finance minister, and his Belgian counterpart, Steven Vanackere, in Brussels. The European commission "temporarily approved" the €10bn increase in guarantees "in order to preserve financial stability." It said would take a final view on whether the move was compatible with EU state aid rules when it had assessed the plan to dismember the bank. Dexia became the most prominent victim of the financial and eurozone crises by having to be bailed out twice in three years. The specialist lender to local authorities has used up almost all its existing guarantees which were granted in October to ease a funding squeeze. Most of the guarantees have been used up in redeeming unsecured loans provided by its former Belgian banking unit. Dexia needs additional guarantees in order to increase collateral following a fall in interest-rate swap contracts. The bank is being dismembered as a condition of its second bailout in October, with a firesale of assets that contributed to net losses of €11.6bn in 2011, after units were sold for below their accounting value. Dexia is expected soon to sign a deal selling Denizbank, its Turkish lender and its most valuable remaining asset, for about €3bn to Sberbank, the Russian lender which outbid Qatar National Bank, after the two entered exclusive talks last month. Lack of access to finance left Dexia needing a second bailout in October of €90bn of state guarantees by France, Belgium and Luxembourg. Guarantees covering half that amount - €45bn - were put in place temporarily while the commission reviewed Dexia's aid and break-up plan. Belgium, which provides 60.5 per cent of the guarantees, has been resistant to providing more but appears to have been persuaded by France, which shoulders 36.5 per cent, and Luxembourg, which supplies the remainder. France is thought to have secured Belgium's agreement by promising to accelerate the prolonged sale of Dexia's French municipal finance unit to the Caisse des Dépôts et Consignations, the French sovereign wealth fund, and Banque Postale, the banking arm of La Poste, the French post office. The rump of the Brussels-based bank has needed access to state guarantees to function. It comprises a portfolio of bonds and three units which mainly finance local authorities. There has been tension between the commission and Dexia, the former assessing state bailouts in terms of whether they constitute state aid, while Dexia has argued that since it is no longer a going concern, rules on competition issues should no longer apply. Mario Draghi, president of the European Central Bank, last week cited Dexia as an example of how national supervisors had repeatedly underestimated how much a rescue would cost. There is a first assessment, then a second, a third, a fourth. Everyone ends up doing the right thing, but at the highest cost," he said.